Marathon Oil chief executive Clarence P. Cazalot Jr. saw his total compensation rise 53% to $13.1 million in 2007, a year in which the company's profit fell but its share price climbed, according to an analysis of a proxy statement filed Monday.
Cazalot's pay package rose from the $8.5 million he got in 2006, according to Marathon's filing with the Securities and Exchange Commission.
One of the big differences was that Cazalot, 57, received $6.26 million in incentive-plan and other bonuses for 2007, compared with a $3.2 million bonus the year before.
The remainder of Cazalot's 2007 package was a $1.3 million salary, up from $1.2 million in 2006; stock options valued at $5.2 million when they were granted May 30; and $326,983 for a variety of perks that include use of a company airplane, club memberships and contributions to deferred compensation plans.
The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC.
Big Oil's big four
Marathon Oil Corp. (MRO, Fortune 500) is the fourth-largest U.S. integrated oil company, meaning it's involved in exploration and production as well as refining and marketing. The nation's top three are Exxon Mobil Corp. (XOM, Fortune 500), Chevron Corp. (CVX, Fortune 500) and ConocoPhillips (COP, Fortune 500), respectively.
Cazalot, Marathon's CEO since 2002, was by far the Houston-based company's highest-paid official among five company executives listed in the report.
In its proxy, Marathon said it based part of Cazalot's compensation on certain company metrics, including its annual stock performance against peers in the Amex Oil Index. The company said its stock price rose 26 percent in 2007, ranking it fourth among 13 companies in the index.
That was down from 52 percent growth in 2006.
For all of 2007, Marathon's earnings fell 24% to $3.96 billion from $5.23 billion a year earlier. Full-year revenue dipped to $65.21 billion from $65.45 billion in fiscal year 2006.
Marathon's profits were hurt in the second half of 2007 by sharply lower margins at its refineries, project delays and higher costs. The refining margin pressure was driven mostly by high crude prices - a factor that crimped earnings at several oil producers with refining operations.
Still, the company said in its proxy, "Marathon had a very good performance in 2007."
Marathon shares gained 45 cents to $51.91 Monday. They've traded in a 52-week range of $43.24 to $67.04.
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