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Murphy Oil CEO Jenkins, Hit by Virus, Also Takes Financial Blow

2 min read

The COVID-19 pandemic has hit Murphy Oil Corp. CEO Roger W. Jenkins with a one-two punch: He’s sick with the virus, though recovering, and his wallet is taking a beating.

The El Dorado oil exploration and production company announced Thursday that Jenkins, 58, had the virus and was taking leave for quarantine. On Tuesday, in its annual proxy statement filed with the Securities and Exchange Commission, the company noted that David Looney, executive vice president and chief financial officer, had stepped into the top executive spot.

“We expect Roger to fully recover and resume his duties,” a special addendum to the proxy said.

The document, as usual, listed compensation of named executive officers, but footnoted crucial context about the market value of unvested stock awards listed based on values just a few weeks ago, before a global crash in oil stocks that was just rebounding a bit in Tuesday morning trading.

The bottom line for Jenkins, who the proxy said had $18.8 million in total compensation for 2019, compared with $13.3 million in 2018, actually received stock worth only about 25% of that because of the recent plunge. A special note from the board of directors’ Executive Compensation Committee, as an example, charted Jenkins $10.6 million worth of stock awards for 2019 is now worth just $2 million, down 81 percent. And that his 2018 stock award, once worth $9.2 million, is down to $1.7 million in value.

“These are unprecedented times for Murphy,” the note said. “Our entire industry has been disrupted both by the COVID-19 pandemic as well as recent volatility in the global oil markets. In just the first quarter of 2020, Murphy stock has closed daily trading as high as $28.00 per share, and as low as below $5.00 per share.” 

Jenkins himself, in the proxy, warned that “it’s hard to say how things will look by the time this 2020 Proxy Report reaches you, as the world has been dramatically changed by the outbreak of COVID-19. … We recognize we cannot minimize the challenges facing us today; however, we can lean in and show resilience as we manage our business through them.”

Jenkins’ base salary for 2019, $1.33 million, was barely changed from last year, but a $4.3 million change in pension value and deferred compensation added to the total package. Looney’s total compensation was listed at $4.2 million, though his $3.17 million stock award is also devalued proportionally to the CEO’s.

Executive Vice President Michael K. McFadyen’s $4.2 million in total compensation included $2.8 million in stock awards now worth a fraction of what they were.

The company, which reported $1.1 billion in net income for full-year 2019, including the proceeds from a major sale of Asian offshore assets, will hold its annual stockholders meeting May 13 in El Dorado. Agenda items include executive compensation, which the proxy said might be altered in light of the pandemic; election of directors; and keeping KPMG LLP as the corporation’s accounting firm.

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