FAROE Petroleum chief executive Graham Stewart has suffered a 13 per cent drop in the value of his annual pay package in the latest financial year after his bonus fell by 36 per cent.
However the North Sea-focused company revealed that Mr Stewart’s bonus for the preceding year had been increased by eight per cent to correct a mistake in the calculations made previously.
Aberdeen-based Faroe Petroleum’s 2015 annual report shows the value of Mr Stewart’s total emoluments fell by £97,000, to £646,000, from £743,000 in 2014.
The report states that Mr Stewart’s bonus fell to £188,000 in 2015 from £295,000 in the preceding year.
It notes the 2014 figure was restated to correct an underpayment equivalent to eight per cent of salary. This arose as a result of a miscalculation of the score that Mr Stewart had achieved in the test used to determine the size of the payout.
The original bonus was understated by £29,000, at £266,000.
The company did not provide details of the miscalculation.
The bonuses of other directors were affected by the same mistake in 2014.
The report notes the company uses a scorecard system in which directors are assessed against targets based on
a range of corporate, operational, financial and executive team performance measures.
The 2015 report covers a year during which oil and gas firms grappled with the impact of the plunge in the crude price.
The chairman of Aim-listed Faroe, John Bentley, noted resources stocks were out of favour with investors.
Faroe cut losses to £122.3m in 2015 from £166m the preceding year.
Average production increased to 10,530 barrels oil equivalent daily from 9,106 boed in 2014.
However Mr Stewart has said Faroe’s strong balance sheet leaves it well placed to cope with challenging conditions.
In 2012 Faroe Petroleum scrapped plans for a controversial incentive scheme following the so-called shareholder spring of unrest about the executive remuneration policies followed by some firms.
Some shareholders and corporate governance experts criticised Faroe’s scheme for its perceived generosity.
Faroe won approval for a replacement incentive plan under which executives can be awarded shares worth up to 250 per cent of their salaries.
No directors have received awards under that scheme in the last two years.
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