BPC CEO takes massive pay cut
As the Bahamas Petroleum Company (BPC) plays the waiting game until it can drill its first exploratory well in Bahamian waters, the company has made changes to its CEO’s salary, reducing it and other accrued payments and entitlements totaling about $1.2 million, in order to reduce cash costs to the company’s shareholders.
A statement on BPC’s website outlined that its CEO Simon Potter’s basic salary will be “significantly” reduced to $375,000 and the amended contract “writes off accrued cash payments and ends accrual of conditional share entitlements”.
“Following the fall in the price of oil during 2015 and general slowdown in the oil and gas sector, the CEO proposed substantial changes to his compensation package to dramatically reduce cash costs to shareholders,” the statement notes.
“Since April 1, 2016, 90 percent of his compensation has been forgone to be repaid in an equal mix of cash and shares conditional on successful funding arrangements for an exploration well consistent with license obligations.”
The new terms of Potter’s contract also include: “No change to the term of the existing contract, following which a three-month notice period from either party applies; all deferred cash entitlements, totaling approximately $1 million, to be written off; no further share entitlements are to be awarded or accrued; all existing share entitlements (totaling 63,567,276 ordinary shares) and options are retained whilst continuing to be conditional on successful conclusion of funding arrangements for an exploration well; and no future entitlement to company pension contributions. Accrued but unpaid entitlement totalling approximately $0.2 million to be written off.”
Non-Executive Chairman of BPC Bill Schrader said the move realigns the relationship between management and the company’s shareholders.
“We consider the changes outlined to the CEO’s contractual arrangements to be in the best interests of shareholders, by removing future cash obligations whilst maintaining the incentivization of our CEO at this important and exciting time for the company,” he said.
BPC announced in May that it might be closer to finding a farm-in partner for the exploration of oil within The Bahamas, after it announced that it has entered into a “confidentiality and exclusivity agreement with a major international oil company to conclude a detailed technical evaluation of the company’s licenses”.
BPC added in the May announcement, published on its website, that it will seek to “develop a commercial framework for a potential transaction” with the international oil company, which it said will remain anonymous based on its agreements.
Potter said then, that this step brings the company closer to realizing a partner that allows an exploratory oil well to be drilled.