Imperial Oil CEO Brad Corson at a news conference in Calgary on Dec. 4, 2019.Todd Korol/The Canadian Press
Imperial Oil IMO-T chief executive officer Brad Corson’s pay nearly doubled in 2022 to $17.34-million, making him the top-paid CEO among the major companies in the Canadian energy industry.
He received the compensation in a year where tainted water from a tailings pond leaked into the environment around the Kearl oil sands project, which Imperial co-owns. A lake at the northeastern edge of the northern Alberta site now contains levels of toxins that exceed government guidelines.
The federal government, local Indigenous communities and the public at large were not informed of the Kearl seepage, which started in May, 2022, until this February, after a separate incident spilled 5.3 million litres of industrial wastewater laced with pollutants from a drainage pond into the environment.
Mr. Corson and other Imperial Oil executives appeared before a House of Commons committee Thursday to testify on the matter. After the publication of this story online, he faced questioning from multiple members of Parliament on his pay.
“If you were to ask any of the First Nations and Métis communities that have been impacted by the Kearl spill, they may suggest that $17.3-million dollars a year is inappropriate for the performance that you’ve provided for Imperial Oil,” NDP MP Heather McPherson (Edmonton-Strathcona) said.
Mr. Corson declined to answer questions from a Globe and Mail reporter after the hearing.
Mr. Corson’s package compares to total pay of $8.75-million in 2021.
Imperial paid Mr. Corson a salary of $1.05-million in 2022. His bonus of $2.22-million was more than double 2021′s annual incentive pay. The company awarded him $6.46-million in stock awards, compared to $3.45-million in stock awards in 2021.
He also received a payout of $727,427 from a long-term bonus plan and $1.98-million in other compensation, including dividend payments on his stock awards, benefits including life insurance and a club membership, and expatriate assignment costs, since Mr. Corson, an employee of Imperial’s majority shareholder ExxonMobil, is on assignment in Calgary as CEO. The 61-year-old has worked for ExxonMobil for four decades.
The 2022 compensation total also includes a $4.91-million estimate of the annual increase in the cost of providing his pension. Securities regulators require companies to include estimates of changes in executives’ total future pension obligation each year. When executives’ pay is significantly different from the estimates in the formula, that yields a change – positive or negative – in the future pension cost.
When removing the pension item from his past two pay packages, his total compensation rose to $12.44-million in 2022 from $7.55-million in 2021.
ExxonMobil pays the cash costs of Imperial Oil’s executive compensation, such as salary bonus and pension. Imperial Oil issues shares to pay out stock compensation awards.
Imperial Oil lists ”safety, health, and environmental performance” first in a list of business performance measures that it considers as it determines compensation. And in a narrative review of its “exceptional business results,” it said it “delivered strong safety performance and effective enterprise risk management” and “demonstrated clear commitment to sustainability.”
However, the company says it has no formula or specific metrics it uses to award annual cash bonuses or stock grants, which is increasingly rare in a world where most companies have moved to lay out specific financial targets and supplement them with environmental, social and governance goals.
“Formula-based performance assessments and compensation typically require emphasis on two or three business metrics,” Imperial explains to shareholders in its recently filed proxy circular. “For the company to be an industry leader and effectively manage the technical complexity and integrated scope of its operations, senior executives must advance multiple strategies and objectives in parallel, versus emphasizing one or two at the expense of others that require equal attention.”
Imperial adds: “Senior executives and officers are expected to perform at the highest level or they are replaced.”
Mr. Corson’s pay, specifically, “was appropriate” based on the company’s financial and operating performance and his effectiveness in leading the organization, Imperial says.
Imperial Oil said its operating performance allowed it to take advantage of high commodity prices and post record earnings of $7.34-billion and cash flow of $10.5-billion last year. It raised its dividend by 63 per cent – the 28th consecutive year of increases – and said it bought back $6.4-billion of stock. Total shareholder return on the company’s stock in 2022, including dividends, was 47.8 per cent, according to S&P Global Market Intelligence.
In taking the crown for Canadian-energy CEO pay, Mr. Corson supplants Al Monaco of Enbridge Inc., whose pay slipped to $17.23-million in 2022 from $19.04-million in 2021. Mr. Monaco retired from the job on Jan. 1 of this year.
Most of the decline came from a smaller estimate of his future pension income and a bonus of $4.07-million, which was about $600,000 less than 2021′s annual incentive pay.
Mr. Monaco’s industry-leading pay has typically matched Enbridge’s status as a giant of the Canadian energy industry: Its market capitalization of $108-billion is nearly $20-billion more than second-place Canadian Natural Resources. Imperial Oil has a market capitalization of about $42-billion.
Among other Canadian energy companies in the S&P/TSX 60 – an index of some of the country’s most valuable stocks – pay was up more modestly, or even fell, for those who have stayed in the CEO role since 2021. At all of the companies, share and stock option awards, which can change in value over time, made up the bulk of 2022 pay.
Canadian Natural paid CEO Tim McKay $9.03-million, down 4.7 per cent from $9.47-million in 2021, owing to a smaller bonus and fewer stock awards. Executive chairman Murray Edwards is the company’s best-paid executive at $15.63-million, down from $16.11-million in 2021.
TC Energy’s François Poirier made $10.60-million, an 8.1-per-cent increase from $9.81-million on the strength of a higher bonus and share awards.
A smaller bonus and stock awards meant Cenovus’ Alex Pourbaix made $12.84-million in his final full year as CEO, down 8.3 per cent from 2021′s $13.99-million.
Suncor paid CEO Mark Little $15.63-million in his final year as CEO, including termination payments. He made $11.80-million in 2021.
Pembina Pipeline paid new CEO Scott Burrows $11.31-million. His predecessor, Michael Dilger, made $14.35-million in 2021.
With a report from Emma Graney