Bankrupt oil & gas corporations paid top executives $200 million in cash bonuses

Dozens of fossil fuel executives received lavish payouts before leaving their companies during the surge in oil and gas company bankruptcies in recent years, according to a new report by Public Citizen and Documented.

According to the report, “Fueling Failure,” the U.S. oil and gas corporations that filed the 25 largest bankruptcy cases between 2018 to 2020 paid a combined total of nearly $200 million in cash bonuses, retention payments and severance to 76 executives. At the same time, thousands of workers were laid off and investors’ shares became worthless.

The report finds that while most companies were able to exit the bankruptcy reorganization process with debt levels reduced and new managers in charge, the companies’ fragility highlights the danger that taxpayers could foot the bill for potential environmental cleanup.

California Resources Corporation paid CEO Todd Stevens a bonus of $14½ million to run the company into bankruptcy.

“For oil industry executives, failure is very much an option. Whether these fossil fuel executives lead their corporations to financial success or catastrophic flops, they still receive exorbitant payouts, while workers lose jobs, investors lose money and taxpayers may wind up footing the bill for environmental cleanup,” said Alan Zibel, a Public Citizen researcher and the report’s co-author. “These polluting companies are able to profit due to subsidies and regulatory favors, while putting the planet at risk, exploiting public lands and leaving a mess for others to clean up.”

The U.S. oil and gas companies that filed the 25 largest bankruptcy cases from 2018 to 2020 paid a combined $199.4 million in cash bonuses, retention payments and severance to 76 executives, for an average of about $2.6 million per executive, the report found. That compares with salaries of around $50,000 to $60,000 for oil rig workers.

The report analyzed cash bonuses, retention payments and severance, excluding salary and stock awards. The biggest payouts to CEOs went to:

  • Todd Stevens, former CEO of Santa Clarita, Calif.-based California Resources Corp. ($14.5 million);
  • Robert “Doug” Lawler, former CEO of Oklahoma City-based Chesapeake Energy ($8.9 million);
  • Thomas Nusz, former CEO of Houston-based Oasis Petroleum ($8.4 million);
  • Brad Holly, former CEO of Denver-based Whiting Petroleum ($6.4 million); and
  • Marc Edwards, former CEO of Diamond Offshore Drilling ($6 million).

“The fossil fuel industry has been a poster child for ill-conceived corporate welfare for decades, benefiting from numerous subsidies, tax breaks and regulatory favors,” said Robert Weissman, president of Public Citizen. “President Biden must fulfill his campaign pledge of stopping senseless subsidies to this planet-destroying industry and must force polluters to shoulder the cost of cleaning up their own mess.”

Additional findings include:

  • Ten oil and gas CEOs received payouts of more than $4 million; the largest payout was $14.5 million.
  • Nine out of 10 of the largest cash payouts went to CEOs who have since left their companies.
  • More than 10,500 workers lost their jobs.
  • Projected cleanup costs for more than 57,000 oil and gas wells controlled by the companies analyzed could be as high as $10.3 billion.
  • The oil and gas drilling companies analyzed have purchased only $281 million in bonds to cover environmental losses—less than 20% of the companies’ own estimates of $1.6 billion in environmental liabilities.

The report is available here.

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