Alex Pourbaix, seen in 2019 when he was CEO of Cenovus Energy, moved to the role of the company’s executive chair in 2023. He received $12.84-million from the company in 2022, his last full year as CEO, and $8.11-million in 2023.Todd Korol/The Canadian Press
Turnover at the top can be an expensive proposition for a company – especially if the former chief executive officer sticks around.
A Globe and Mail review of executive pay at 15 energy and precious-metals mining companies in the S&P/TSX 60 finds that seven have changed CEOs since the beginning of 2022. In some cases – such as at Suncor Energy Inc. SU-T – severance and sign-on payments cost shareholders tens of millions of dollars.
At other companies, however, the decision to allow the CEO to slide into an “executive chair” role creates two high-paying positions at the top, where previously there was one.
For example, in February, 2023, Cenovus Energy Inc. CVE-T said that CEO Alex Pourbaix, 57, would move to the role of executive chair at the company’s annual meeting in late April of that year. Jon McKenzie, the company’s 55-year-old chief operating officer, became CEO. In September, Cenovus promoted Keith Chiasson to COO to replace Mr. McKenzie and promoted Doreen Cole to replace Mr. Chiasson as executive vice-president, downstream.
Mr. McKenzie made $8.67-million in 2023, including $6.11-million in share and option awards. That was a savings from Mr. Pourbaix’s pay in 2022, when he made $12.84-million, including $9.42-million in share and option awards.
Cenovus paid Mr. Pourbaix $8.11-million in 2023, however, including $6.25-million in share and option awards granted 11 days after the transition announcement. The combined pay of $16.78-million was 31 per cent higher than what Mr. Pourbaix made in 2022.
Cenovus made another share and option award to Mr. Pourbaix in February of this year, according to stock-trading records filed with Canadian securities regulators. The filings do not make an estimate of their value.
Canadian Natural Resources Ltd. CNQ-T did Cenovus one better. Early last November, the company announced that Tim McKay would assume the role of vice-chair on Feb. 28, when he was 62. Scott Stauth, the 58-year-old COO, oil sands, succeeded him as president. (The company does not use CEO as a formal title.) Canadian Natural promoted Jay Froc from the position of senior vice-president, oil sands mining and upgrading, to replace Mr. Stauth on Jan. 1.
Mr. McKay can’t be executive chair because that position is currently held by Murray Edwards, the company’s best-paid employee. Mr. Edwards made $17.02-million in 2023, including a $1 salary, a $2.32-million cash bonus, and $14.69-million in stock awards. He made $15.63-million in 2022 and $16.11-million in 2021, with stock awards also making up the bulk of his pay in those years.
Mr. McKay made $7.21-million in 2023, as Canadian Natural scaled back his stock awards in anticipation of his retirement. In 2022, he made $9.03-million.
Canadian Natural did not pro-actively disclose Mr. McKay’s 2024 compensation as vice-chair. Stock-trading records show the company granted him 52,375 performance shares on Jan. 25. If valued with the closing market price of $86.76 that day, the grant was worth $4.54-million.
Cenovus and Canadian Natural did not respond to requests for comment.
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At Agnico Eagle Ltd. AEM-T, former CEO Sean Boyd served as executive chair for nearly two years, starting on the Feb. 8, 2022, close of the company’s acquisition of Kirkland Lake Gold Ltd. Thanks to a special bonus for sealing the Kirkland deal, he actually made more in 2022 – US$15.42-million – than the US$12.52-million he made in 2021, his final full year as CEO.
Agnico Eagle also paid US$10.49-million in severance to former Kirkland CEO Anthony Makuch after he left 16 days into his tenure as CEO. And it paid US$7.62-million to new CEO Ammar Al-Joundi.
These decisions led to Agnico Eagle shareholders giving only 25-per-cent support to its advisory, non-binding say-on-pay measure in the spring of 2023. (The average Canadian result is around 90-per-cent approval.)
The company’s 2023 compensation cut way down on the top-level pay, and Mr. Boyd left the executive chair role for a traditional board-chair position at the end of the year. That led to a turnaround in shareholder sentiment: On April 26, Agnico Eagle received 96 per cent of votes in favour.
“Over the last year, the company had an open and constructive dialogue with its shareholders and they have responded positively,” spokesperson Jean-Marie Clouet said.
Still, Mr. Boyd made US$6.01-million in 2023 in the executive chair role, including a US$2.22-million salary and US$3.27-million in stock awards. Mr. Al-Joundi made US$7.76-million, including US$4.35-million in stock awards.
One company that hasn’t changed CEOs recently is Barrick Gold Corp. ABX-T Mark Bristow has been in the top job since 2019, making US$12.73-million in 2023, including US$5.77-million in stock awards.
But for 10 years, John Thornton served as the company’s executive chair, making US$2.91-million in 2023. The compensation included a salary of US$2.5-million, plus pension and other benefits. He left the role Feb. 13 and is now the chair of the board. Barrick’s directors made between US$290,000 and US$385,000, depending on their roles and committee assignments.
Companies can incur even more expense when the CEO doesn’t get to stay with a new title. As previously reported by The Globe, Suncor paid former Imperial Oil Ltd. CEO Rich Kruger $36.8-million in 2023, his first year at the company. The 63-year-old’s sign-on package included a grant of restricted stock valued at $23.11-million.
Suncor said in a proxy circular that the award was “a direct replacement of the future compensation forfeited as a result of coming out of retirement to lead Suncor.” (When Mr. Kruger retired from Imperial Oil in 2019, the company said he had accumulated pension benefits valued at just under $18-million. He also had unvested restricted stock in Imperial Oil and its parent, Exxon Mobil Corp., that was worth $31.3-million.)
The Suncor job was open because former CEO Mark Little resigned in 2022 after pressure from an activist investor stemming from lacklustre fiscal performance as well as a spate of safety incidents and worksite fatalities. Mr. Little made $15.63-million in 2022, including a $5.97-million termination payment.
At Enbridge Inc. ENB-T, Al Monaco retired on Dec. 31, 2022, and left the company’s board that day. He made $17.23-million in 2022, including $11.13-million in stock awards.
Aged 63 in his final year at the company, Mr. Monaco was allowed to keep most of his past stock awards on retirement. Enbridge estimated the value of that provision at $18.8-million – far less than the $46.9-million value he’d receive for an involuntary termination.
Gregory Ebel, Enbridge’s board chair, took over as CEO. He made more in 2023 – $18.73-million, including $11.57-million in stock awards – than Mr. Monaco did in 2022.
Spokesperson Gina Sutherland said that “Enbridge’s CEO is paid for the results he delivers for the company and shareholders,” adding that it considers 89 per cent of Mr. Ebel’s pay – bonus and stock awards – “at-risk.”