Santos chief Kevin Gallagher takes home $11.3m
Kevin Gallagher has become one of Australia’s best paid bosses, after reviving his company from the depths of an oil price crisis.
Santos chief executive Kevin Gallagher has catapulted into one of Australia’s best paid bosses, after reviving the company from the depths of an oil price crisis to nearly triple his pay to more than $11m.
The Scottish executive cashed in a $7.3m bounty of long-term incentives to take home $11.3m in 2019, up from $4.5m a year before.
The windfall puts Mr Gallagher on par with Andrew Mackenzie’s $11.9m payday in his final year at mining giant BHP — a company ten times larger than Santos — and dwarfs Rio Tinto chief Jean-Sebastien Jacques, who pocketed $8.3m in 2018.
The pay packet elevates the Santos boss to Australia’s best paid energy executive by some distance while also outflanking big four bank bosses, with ANZ’s Shayne Elliott pocketing $7.8m and CBA’s Matt Comyn taking home $3.4m.
The massive pay bump was triggered after Mr Gallagher hit long-term incentive targets granted when he took the reigns four years ago.
Santos was teetering under a massive debt load after its hefty investment in the GLNG project, exacerbated by a collapse in the oil price, which had crashed below $US27 a barrel for the first time since 2003.
The Santos boss was granted long-term incentives in 2016 with a face value of $2.7m, when Santos shares were trading at just $3.30.
By the end of 2019 Santos shares had more than doubled to $8.18, putting the incentive value at $7.37m — with $4.7m of that jump derived from share price growth over the four-year vesting period.
Woodside Petroleum chief Peter Coleman took home $7.44m in 2019 and Oil Search’s Peter Botten was paid $6.5m in 2018.
Mr Gallagher faces a busy few months as he looks to win approvals for Santos’ $3bn Narrabri gas project in NSW and assesses a final investment decision on its Barossa development in the Northern Territory, which has been put back until the second quarter due to delayed commercial talks.
Santos said on Thursday its annual net profit fall by 1 per cent, due to lower oil and gas prices over the year.
The South Australian producer posted underlying profit of $US719m ($1.07bn), missing a consensus estimate of $744m, and down from $US727m a year ago.
Its bottom line net profit rose 7 per cent to $US674m, from $US630m, with sales up 10 per cent to $US4.03bn.
The company will pay a final dividend of US5c, taking the annual payout to US11c, falling short of consensus expectation for US12c. Free cash flow rose 13 per cent to $US1.13bn for the year.
Santos expects a decision by NSW authorities on Narrabri by June, with the government concluding its assessment of the controversial gas development before facing a final review from the state’s Independent Planning Commission.
Santos has been frustrated over the longwinded regulatory hurdles, arguing the development could help ease the tight east coast market by providing up to half the state’s gas needs.
Santos submitted its environmental impact statement for Narrabri in February 2017 to the NSW Department of Planning and Environment.
Santos is also lining up a final investment decision on the Barossa project in northern Australia to backfill its Darwin LNG plant in the second quarter. And it is due to make a decision on the engineering and design phase for its Dorado gas project in Western Australia in the same three-month period.
Santos shares fell 1.2 per cent on Thursday to $8.07.
