Guardian Climate Expose: Big Oil Companies Pay Bonuses to CEOs who Increase Profits

Guest essay by Eric Worrall

According to The Guardian, oil executives are so focussed on profit they are ignoring the opportunity to make even more money by investing in renewables.

Oil firm bosses’ pay ‘incentivises them to undermine climate action’

Lucrative pay and share options linked to continued extraction of fossil fuels by ExxonMobil, Chevron, Shell and BP

Jonathan Watts
@jonathanwatts
Thu 15 Apr 2021 14.00 AEST

Lucrative pay and share options have created an incentive for oil company executives to resist climate action, according to a study that casts doubt on recent net-zero commitments by BP and Shell.

Compensation packages for CEOs, often in excess of $10m (£7.2m), are linked to continued extraction of fossil fuels, exploration of new fields and the promotion of strong market demand through advertising, lobbying and government subsidies, the report says.

The setup with executives runs counter to efforts around the world to keep global heating to 1.5-2C (2.7-3.6F) above pre-industrial levels.

Between 1990 and 2019 the four companies made a combined profit of about $2tn. A minuscule fraction of these funds has been invested in low-carbon energy.

ExxonMobil allocated 0.22% of its capital expenditure to low-carbon energy in the eight years until 2018. The share at Chevron was almost identical. Shell managed 1.3% and BP 2.3%. None were aligned with a 1.5C pathway, the report says.

Read more: https://www.theguardian.com/environment/2021/apr/15/oil-firm-ceos-pay-is-an-incentive-to-resist-climate-action-study-finds

I don’t get why Jonathan Watts seems upset by the structure of oil company bonuses. Surely in this case greed is good. The Guardian regularly claims that renewables are cheaper than fossil fuel. If renewables really are an opportunity to boost profits, the most profit obsessed oil executives will be the first to jump ship and embrace renewables.

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Ron Long
April 15, 2021 6:08 pm

Good catch on further lunacy, Eric. There are two points to be made about large corporations: 1. the shareholders own the company, and 2. the goal of the CEO is to maximize shareholder wealth. Sure, these large corporations need to follow laws and regulations and cater to the culture they operate in, but make no mistake about it, maximizing shareholder wealth is their focus.

LdB
Reply to  Ron Long
April 15, 2021 7:51 pm

In most countries it is a crime to not act that way.

observa
Reply to  LdB
April 16, 2021 7:10 am
Zig Zag Wanderer
Reply to  Ron Long
April 15, 2021 11:06 pm

And what many people fail to understand, through ignorance wilful or otherwise, is that those shareholders are ordinary Joes and Joannas thorough their pensions or other investments. Essentially, WE own those companies, not some faceless billionaire. Most companies, anyway, yes there are obviously exceptions, but even those are largely owned by the public, even if at one or two removes.

Gerry, England
Reply to  Zig Zag Wanderer
April 16, 2021 6:24 am

One of the ironies of Obummer making sure ‘British Petroleum’ as he called it was hit with huge fraudulent costs for Deep Water Horizon is that it had more US shareholders then British ones as well as more pension and investment fundholders, but then nobody ever accused him of being intelligent.

John Endicott
Reply to  Gerry, England
April 19, 2021 8:22 am

True, but he was described as “articulate and bright and clean and a nice-looking guy” so that’s has to count for something right?

George Daddis
Reply to  Ron Long
April 16, 2021 6:52 am

You wouldn’t know it from the 100 corporations signing the critique of voting integrity laws.
My hope is they get hit hard and visibly lose money; then a shareholder has standing to sue for fiscal mismanagement.

Note: Before you claim I’m supporting “Jim Crow” please read GA SB202 and state even one item that discriminates against anyone. The ID requirement (any one of 6 forms of ID including the last digits of your SS# or a utility bill) replaces signature verification on absentee ballots that the courts decided was unworkable. There were NO drop boxes prior to their temporary COVID use in November. This law makes them permanent.

Last edited 28 days ago by George Daddis
Ron Long
Reply to  George Daddis
April 16, 2021 8:04 am

Go get them, George. I have stopped purchasing anything from any of these “woke” companies, and now am also forced to stop watching MLB (stopped NBA a long time ago, NFL is hit or miss) The idea that conservatives don’t buy anything, or don’t care about this misconduct, is going to bite them.

Barnes Moore
Reply to  George Daddis
April 16, 2021 10:00 am

That the left can get away with pushing false narratives based on flagrant lies is more than a little troubling. They have been doing it for a long time, but the lies about the GA voting law raise it to a new level. The lies are easily debunked and you would think that corporate CEOs would be smarter than to so flagrantly support them, yet here we are. And it’s not just the CEOs. Read comments in any online article from the Times to the WSJ and there are readers who are also pushing the false narrative – and it does not matter if you provide all the documentation necessary to expose the lies, they continue the Jim Crow 2.0 narrative.

Pillage Idiot
April 15, 2021 6:10 pm

“ExxonMobil allocated 0.22% of its capital expenditure to low-carbon energy in the eight years until 2018.”

Natural gas is certainly “low-carbon energy” compared to the coal it displaced in electricity generation.

commieBob
Reply to  Pillage Idiot
April 15, 2021 6:32 pm

This is riotously funny!

Of all the countries in the world in 2019, the United States of America had the greatest reduction in CO2. link Of course it’s mostly because of natural gas, not wind and solar.

Of course, that’s not good enough for the greenies. Just reducing CO2 isn’t good enough for them. You have to do it in the approved manner. They are just so darn Procrustean.

Tom Halla
April 15, 2021 6:15 pm

If “renewables” were actually cheaper then fossil fuels or nuclear, they would not require subsidies and purchase requirements. The Grauniad is doing it’s typical gaslighting (using LED bulbs, and batteries charged by wind and solar).

ResourceGuy
April 15, 2021 6:17 pm

I know, let’s let BP and Shell and their investors be the test subjects devised by the Guardian no less. Who needs those pesky dividends anyway?

n.n
April 15, 2021 6:17 pm

The Green Blight, too, thus environmental evasion, ecological corruption, shared/shifted responsibility, labor and environmental arbitrage, sociopolitical and quasi-religious inoculation, etc for the cause of intermittent/renewable energy and profits.

Scissor
April 15, 2021 6:18 pm

When I worked for an oil company (rhymes with hell), it was pretty well known that the main objective was to make a profit. In fact, our refinery optimization modelling program was called PROFIT.

Anyway, it’s snowing like crazy here and ski resorts are closing soon. So, I’ve decided to call in asymptomatic tomorrow.

John Dueker
Reply to  Scissor
April 15, 2021 7:02 pm

I worked for one that rhymes with Big Pr*ck and had similar experience but I don’t ski.

Scissor
Reply to  John Dueker
April 15, 2021 7:43 pm

I think I met your boss.

Redge
Reply to  Scissor
April 15, 2021 10:45 pm

Other than businesses living off the taxpayer, the main objective of any business has to be profit or they would soon be out of business.

April 15, 2021 6:19 pm

Unfortunately for the Grauniad and the ‘Renewables’ the executives are trained to read, analyses reports and can see that ‘Renewables’ are a great way to lose money and go bankrupt.

Scissor
Reply to  nicholas tesdorf
April 15, 2021 7:59 pm

The key is to do it at small scale or get someone else (rhymes with raxrayer) to pay for it.

I like this technology as it makes good fuels (although a little on the expensive side).

https://www.shell.com/business-customers/catalysts-technologies/licensed-technologies/benefits-of-biofuels/ih2-technology.html

Redge
Reply to  nicholas tesdorf
April 15, 2021 10:48 pm

…a great way to lose money and go bankrupt.

Only after government (taxpayer) grants/ loans/ subsidies/ incentives have been shared out amongst the CEO’s

Last edited 29 days ago by Redge
John Endicott
Reply to  nicholas tesdorf
April 19, 2021 8:28 am

can see that ‘Renewables’ are a great way to lose money and go bankrupt.

Only if they’re not farming the taxpayer funded subsidies. As long as there are subsidies to farm, it’s possible for a company to make money on renewables. It’s the taxpayer that gets the shaft.

Shanghai Dan
April 15, 2021 6:34 pm

Meanwhile, Great Britain’s been 55%+ powered by natural gas, and 15% powered by nuclear, for the last 24 hours:

https://www.electricitymap.org/zone/GB

So much for all those massively low-cost and reliable newables!

Scissor
Reply to  Shanghai Dan
April 15, 2021 7:50 pm

How does even 0.01% of electricity come from solar at night? I understand that is essentially zero but it really should be 0.00% right?

Ed Zuiderwijk
Reply to  Scissor
April 16, 2021 12:32 am

Someone burning candles in front of a solar panel?

Sal Minella
Reply to  Scissor
April 16, 2021 6:04 am

Zero-point energy? Quantum fluctuations?

BobM
Reply to  Scissor
April 16, 2021 6:54 am

Moonlight?

Pat from kerbob
Reply to  Shanghai Dan
April 15, 2021 9:23 pm

At least this app shows gas generation as low carbon
Must be a mistake

Mr.
April 15, 2021 6:57 pm

I reckon that it’s great that The Guardian is publicizing the lucrative jobs possibilities at oil companies.

Most youngsters I know have Queen’s iconic track “I Want It All” playing on repeat on their air buds.

So who dey gonna call when dey wantin’ a job?

Felix
April 15, 2021 7:13 pm

Statists’ two-faced comprehension of profits is a perfect example of their general willful ignorance. All CEOs care about is profits. CEOs don’t care about profits. At the same time, of course.

Robert of Texas
April 15, 2021 7:30 pm

OMG! They are paying people for being successful? This cannot be – it goes against all of our (liberal) socialist ideals! (<– Yes, sarcasm)

LdB
Reply to  Robert of Texas
April 15, 2021 7:53 pm

Yes in there world you are pay CEO’s for how much wealth they have distributed or sloshed into the green trough for the greentard snouts to digest.

Zig Zag Wanderer
Reply to  Robert of Texas
April 15, 2021 11:11 pm

OMG! They are paying people for being successful? This cannot be – it goes against all of our (liberal) socialist ideals! (<– Yes, sarcasm)

I see no sarcasm. At the logical conclusion of socialism, communism, you do not get rewarded for success. That’s why it fails every single time.

Brian Jackson
Reply to  Zig Zag Wanderer
April 16, 2021 1:16 am

brian.jackson10@talktalk.net
That is, if you ignore being sent to the gulag or shot for failing to meet your target.

markl
April 15, 2021 7:37 pm

Who’d have thought that businesses are about profit? Before a business is taken over or eliminated by government how do they think it was started? Marxism/Socialism is a going out of business sale. Without successful businesses providing the capital to run the government it collapses …. ask old Russia or any of the numerous failed Marxist states.

Abolition Man
Reply to  markl
April 15, 2021 8:39 pm

markl,
We have to be very cognizant of the ChiCom model of Marxism/Socialism! The CCP allow individuals to build companies like helium balloons at a party, then they take them over and loot them for the party elite! The former owners are sent to the chop shops to be parted out if they do not acquiesce politely! All this wonderful behavior is enabled by our Big Tech Nazis and multi-national corporations that have no problem doing business in China, but want to boycott Georgia for daring clean up elections! At least Georgia still wants to have elections!

Tom in Toronto
April 15, 2021 7:54 pm

OMG! Shareholders are willing to pay people to help make their investments profitable!
SCANDAL!!!

Gary Pearse
April 15, 2021 7:54 pm

If there were big profits to make on ruinables, the whole schmeer would be run by the energy giants. Oh they might be attracted by government subsidies, but shrewd businessmen know that subsidies are unlikely to last. Didn’t they end in Spain, Australia and Germany? A change in government is always a risk.

Also, they have real engineering departments. Like Google’s engineers, they will have learned that these technologies are totally inadequate to takeover from fossil fuels and indeed need fossil fuels to back them up and to mine, process and manufacture cement, steel, glass, refined specialty metals, fiberglass, silicon metal crystals, carbon based resins etc.

They talk about the abundance of silica in the earth’s crust, ignorant of the fact that only the very purest of quartz can be used – over 99.9+% Si2O with single digit ppm of K20, FeO and fractions of a ppm other elements. These are obtained from some pegmatites and rare ultra pure quartzites. They have to use thick carbon electrodes in graphite crucibles for carbon arc reduction of the oxide to submetallic silicon – lots of CO2- (stoichiometric = 1 molecule of carbon dioxide for 1 atom of silicon not counting material lost in this and subsequent processes).

The raw silicon then needs to be refined with hydrochloric acid at 300 C, treated with hydrogen at 1000 C, be melted at 1400 C, crystallized and sawn into thin wafers with material losses of 40-50%. Energy payback for silicon solar cells is up to 4 years, not counting maintenance, cleaning, replacement of damaged cells, electric connections, etc.

Scissor
Reply to  Gary Pearse
April 15, 2021 8:06 pm

You actually know about this stuff don’t you? I recently discovered that I could make SiO from quartz by heating it to more than 1000C in a hydrogen rich flowing stream. SiO reacts with oxygen spontaneously and generates a blue emission. I learned that corrosion engineers in the nuclear industry already knew this but I enjoyed the discovery nonetheless.

Gary Pearse
Reply to  Gary Pearse
April 15, 2021 8:10 pm

Oh, and if there were to be a real threat of replacement of fossil fuels with these artisanal technologies, they would be in the business post haste. They wouldn’t be waiting for the end like Chrismas turkeys. These guys did the real grass roots research in global warming that hasnt been added to in any real way since the 1960s and 70s by the sciency-lite asterisked PhDs of today.

They know, and all of Asia and Africa know that fossil fuels are going to be in greater demand than ever. Investment in coal, oil and gas are prime investments fir the future (abundant coal is a first step out of poverty in these countries not well endowed with oil and gas.)

Chris Bock
April 15, 2021 7:59 pm

Not “The Onion”…?

Tom Abbott
Reply to  Eric Worrall
April 16, 2021 6:14 am

Isn’t that the truth! 🙂

Craig from Oz
April 15, 2021 8:51 pm

Ever wondered why it is Big Oil, and not Medium Oil, or Small Oil?

Is it perhaps… cause they are very successful at their jobs?

I remember a few years back getting into a minor online lover’s tiff over Peak Oil(tm). Someone attempted to mock with ‘You think Big Oil is going to save you after Peak Oil(tm)?’

I answered unironically ‘yes.’

You honestly think a big successful profitable industry is suddenly going to look at the newspapers and say ‘well gosh golly. No more oil. Best we give up our comfortable lifestyles and learn to code’?

Or do you think it more likely to have some 20 year plan already implemented so they can remain a global energy provider for the rest of their grandchildren’s lives?

AleaJactaEst
Reply to  Craig from Oz
April 16, 2021 12:27 am

unfortunately, yes

Look at what the delightfully named CEO of BP has done. Looney literally went from oil & gas to renewables overnight and crashed the share price 30%

https://www.greenpeace.org.uk/news/bp-new-ceo-bernard-looney-climate-change/

dk_
April 15, 2021 8:58 pm

“Private Donors, Corporations, and Government Grants Pay University Scientists to Skew Results for Propaganda and Advertising”

Would also be an obvious headline.

Dennis
April 15, 2021 9:42 pm

If so called renewables were cheaper, and more efficient at producing energy reliably and constantly, than fossil fuelled generators there would be no point in government subsidies.

David Guy-Johnson
April 15, 2021 10:37 pm

The Guardian is undoubtedly the most humourous newspaper in the UK, albeit unintentionally

Patrick B
Reply to  David Guy-Johnson
April 16, 2021 5:38 am

I think the profits are so high in renewables the Guardian should invest at least half its capital and all of its pension monies in renewables.

Alastair gray
April 15, 2021 11:16 pm

B P recently announced a large Methane to Hydrogen plant producing a power of 3GW.
Never mind that this will effectively increase CO 2 emissions in tonnes per Gw by about 30%, it is called green .So they increase emissions and cost which
the users will paybyabout 30%. I would say this obscenity in green idiocy is going to be highly profitable, and there will be subsidies as well. Textbook green greed, which buffoonBoris says is good

Climate believer
April 15, 2021 11:45 pm

Oil company providing energy to the world, creating value and wealth.
The Guardian forced to put a begging bowl at the bottom of each piece because making bird cage liner is a worthless endeavour.

Teddy Lee
April 15, 2021 11:46 pm

That paper would rather beg than make a profit!

Matthew Sykes
April 16, 2021 12:12 am

Only the Guardian could fail to understand the point of a company is to make profit. Typical mushy headed left wing thinking, that assumes they are there to provide a service.

fred250
Reply to  Matthew Sykes
April 16, 2021 12:33 am

Gruniad is there to provide a service..

….. far-left propaganda pap.

Peta of Newark
April 16, 2021 12:26 am

Being a (very minor) shareholder at Royal Dutch Shell, they sent me a link to their…..
Sustainability Report (pdf ~7MB)

You make of it what you will.
(I got brain-ache)

Last edited 29 days ago by Peta of Newark
Sheri
Reply to  Peta of Newark
April 16, 2021 5:19 pm

Sustainability is completely anti-evolution. It mocks Darwin and those who believe that change and the struggle for survival created what we see today. I am so amazed at how evolution is now garbage and hated by the environmentalists.

saveenergy
April 16, 2021 12:26 am

According to The Guardian, oil executives are so focused on profit they are ignoring the opportunity to make even more money by investing in renewables.”

As there’s so much cash to be made from investing in renewables, why aren’t the ‘greens’ investing in renewables ???

In 2012 we invested in a government promoted solar subsidy scam; now 9yrs into a 25yr contract. Our initial investment ~ £8,000 paid back in 4yrs & we get ~£2,000/yr
So at least another £32,000 to come … to be spent on fuel.

Currently (it’s index linked) we get £0.57kWh for something worth £0.04kWh !!!
Not a bad return

Ed Zuiderwijk
April 16, 2021 12:30 am

Jonathan, it is because those CEOs know something you don’t. That ‘renewables’ don’t produce the goods.

fretslider
April 16, 2021 12:35 am

The Grauniad leads by example – unprofitable and throwing money around like confetti

Nick Graves
April 16, 2021 12:52 am

These meeja-studies tyres really have never read The Anti-Capitalistic Mentality by Ludwig von Mises, have they?

IGNORANCE IS STRENGTH

Charlie
April 16, 2021 1:22 am

The Grauniad is also displaying its anti-west agenda. Hey Graun, what are Saudi Aramco, Rosneft, Kuwait Petroleum, National Iranian Oil, China National Petroleum and Abu Dhabi National Oil up to these days? Still firmly in the oil business, I think.

MACK
April 16, 2021 1:24 am

These morons are completely unaware that the law in most western countries says that company executives must focus completely on the shareholders’ welfare. That is true despite the fact that many left wing activist academics deny it.

Rod Evans
April 16, 2021 1:51 am

Fancy a commercial company suggesting other companies are being underhand, because those companies are rewarding their CEOs with money if they increase company profits.
The only type of organisation that could advance such anti business nonsense, is one that has support/funding guaranteed irrespective of its profit or circulation.
Makes you wonder who and what exactly is funding the Guardian’s ongoing acceleration into into its own anti capitalist destruction?

CapitalistRoader
April 16, 2021 3:48 am

Next, the Grauniad will run an exposé on hospital CEO’s and how they’re incentivised to keep newborns from dying, thus increasing population and adding to the climate emergency. 

The pubs are open
April 16, 2021 4:45 am

Or to put it another way. Guarriand writers think oil company executives are ignoring a money making opportunity because they are stupid, ideologically driven and evil.

I’m sure someone is being stupid and ideologically driven and look forward to the paper they write for going bust.

Don Bennett
April 16, 2021 5:49 am

“And in other breaking news, the Sun came up in the east this morning.”

Russell
April 16, 2021 6:01 am

It must be really easy for those fossil-fuel companies to make good profit these days.
No need for any special creativity or innovation.
Just need to read and do the exact opposite of what the Guardian harps on about.
They are sure to be on the right trajectory.

Tom Abbott
April 16, 2021 6:07 am

From the article: “Lucrative pay and share options linked to continued extraction of fossil fuels by ExxonMobil, Chevron, Shell and BP”

I think Captain Obvious here, is clueless. I get the impression that it surprises this author that people do a job in order to get paid.

People who do a very good job in their profession get paid very well, because of the very good job they do. This is not a crime, or some nefarious effort to thwart the Human-caused Climate Change meme.

very old white guy
April 16, 2021 6:47 am

There is no such thing as renewables and the only profit to be made is in sucking up billions in taxpayer money for subsidies.

Shoki Kaneda
April 16, 2021 7:14 am

The horror! Rewarding success is just wrong! Think of how sad that makes failures. Have you no compassion?

Barnes Moore
April 16, 2021 9:54 am

Problem is that companies are being influenced and measured by activist investors who are pushing for ESG initiatives. Corporate boards are also increasingly being infested with like minded ESG activists so it’s not all about profits anymore.

john harmsworth
April 16, 2021 3:22 pm

Guardian management processes. Like governments-pay them based on how much money they spend instead of how much they make! Genius! Does the Guardian make money?

Sheri
April 16, 2021 5:17 pm

“According to The Guardian, oil executives are so focussed on profit they are ignoring the opportunity to make even more money by investing in renewables” Full admission THIS IS ALL ABOUT MONEY AND NOTHING ABOUT THE PLANET OR THE PEOPLE.

guard4her
April 16, 2021 7:31 pm

Wait… oil companies are in the oil business?

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