Murphy Oil Corp. of El Dorado, whose share price has been battered by falling oil prices, is cutting capital spending for a second time in a month — and it's cutting pay for top executives.
The oil company said it would trim 2020 expenditures to $780 million — down from the $1.45 billion it originally expected. In March, as the price of oil plummeted as Saudi Arabia ramped up production, Murphy announced it would cut expenses to $950 million.
Meanwhile, top executives are seeing pay slashed by as much as 35%.
That includes President and CEO Roger Jenkins, who has taken temporary medical leave after being diagnosed with COVID-19. He is expected to recover.
Jenkins' annual salary has been reduced by 35%, while remaining executives received salary reductions of as much as 30 percent with an average of 22 percent. The changes were effective April 1.
The company said its directors, "mindful of the challenging economic environment," have agreed to align with reductions to corporate executives' salaries. Beginning in second quarter 2020, cash retainers for all directors will be lowered by 35 percent, with the chairman reducing his cash retainer by 70 percent.
"Murphy recognizes the reality of the current situation in the commodity markets, and we believe the reduction in dividends, capital expenditures, salaries and retainers are prudent steps to sustain the company for the long term," Claiborne P. Deming, chairman of the board, said in a news release. "We will continue to review our dividend and other items throughout the course of the year and make further adjustments if warranted."
Also Wednesday, the company declared a quarterly cash dividend on the Common Stock of $0.125 per share, or $0.50 per share on an annualized basis.
The company said that, as a result of ongoing crude oil and natural gas market weakness, the board "believes this 50 percent reduction from the previous quarterly level of $0.25 per share is prudent." The dividend is payable on June 1 to stockholders of record as of May 18.
Shares of Murphy Oil (NYSE: MUR) ended the day down more than 8% to $5.60 per share.