Business World

Sunday 19 November 2017

Tullow Oil chiefs to get €18m bonus pot incentive

Heavey may be in line for €5.4m payout if firm's profits keep rising

Aidan Heavey Chief Executive Tullow Oil plc attends the launch of 'Invest in Africa' on January 24, 2012 in Accra, Ghana. Photo: Getty Images
Aidan Heavey Chief Executive Tullow Oil plc attends the launch of 'Invest in Africa' on January 24, 2012 in Accra, Ghana. Photo: Getty Images
Nick Webb

Nick Webb

Lamborghini driving Tullow Oil boss Aidan Heavey and his key executives were awarded a bonus pot worth up to €18m subject to hitting certain targets.

Last week Heavey was awarded 300,000 Tullow shares worth €5.4m, which may vest in 2015. The bonus is "subject to continued employment and the satisfaction of performance conditions", according to the company.

Tullow secretary and general counsel Graham Martin, chief operating officer Paul McDade, chief finance officer Ian Springett and exploration director Angus McCoss were each awarded 175,000 nil cost shares that may vest in three years' time. The market value of each of the blocks of shares was €3.16m at the time of the award.

The €18m bonus share awards were made under Tullow's 2005 "Performance share plan" -- an incentive scheme for top brass flagged in its 2011 annual report.

Unlike stock options, Heavey and his executives will not have to pay any money to receive the shares if they hit the earnings targets.

The chances of Heavey and his executives pocketing the massive bonus improved dramatically last week as Tullow announced yet another bumper oil find. The Irish listed company announced that an oil well in Kenya at Ngamia-1 contained far more oil than had been previously expected. The Ngamia-1 well is the first oil discovery in the energy-rich African country.

From its humble beginnings as a Co Carlow exploration minnow scrabbling for assets in Pakistan, Tullow has grown under Heavey's control to where it has become one of the largest independent oil companies in the world. The ISEQ and FTSE listed firm is now the biggest single holder of oil assets on the entire African continent.

Having discovered the vast Jubilee oilfield under the sea off Ghana, Tullow is now making a massive punt that the oilfield structure may extend all the way across the Atlantic to South America. The company is involved in drilling in the Zaedyus oilfield off the coast of Guyana in South America.

Tullow has traditionally paid Heavey and his executives top dollar. In 2008, the former Aer Lingus accountant -- whose former pop-singer wife Lorraine had a top 10 hit with Peaceful Paradise -- earned €35.2m. The record payout was fuelled by large share awards and bonuses.

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