Wednesday, September 4, 2019

Midland, Texas-Based Diamondback Energy Inc's Top-Tier Executives Average Pay Raise Was a Very Clean, Off-the-Charts 52.9% Per Year During the Past Seven Years (2012-2018) Since Its 2012 IPO

The third Democratic 2020 Presidential candidate televised debate will be held in Houston, Texas on September 12, 2019.  Texas is also the home state of Julian Castro and Beto O'Rourke, who have both gained significant momentum in the past month.

The key issue to Texas citizens should be the huge and continuing Income Inequality Expansion which is at the core of many critical problems the US faces.

Thus I will be doing research and making posts on the average pay raise per year that the Top-Tier Executives of large Texas Companies were rewarded with in the past ten years.  I completed my study of large Texas Non-Oil &  Companies and now I have started studying large Texas Oil & Gas Companies. 

The 16th Texas Oil & Gas Company I am addressing here is Diamondback Energy Inc.

From annual compensation information contained in Company Proxy Statement filings with the US SEC, the chart at the bottom below shows Diamondback Energy's Top-Tier Executives Annual Total Compensation for each of two consecutive full years of employment for the past seven years since its 2012 IPO.
  
Diamondback Energy's Top-Tier Executives Average Pay Raise was a clean, off-the-charts 52.9% per year for the past seven years, which is the third highest of the 16 large Texas Oil & Gas Companies I have addressed so far.
  1. Cheniere Energy Inc +141.9% per year for the past ten years
  2. Kinder Martin +115.8% per year for the past ten years
  3. Diamondback Energy +52.9% per year for the past seven years
  4. Energy Transfer Companies +19.2% per year for the past ten years 
  5. Enterprise Products Partners +16.2% per year for the past ten years
  6. ConocoPhillips +14.8% per year for the past ten years
  7. Pioneer Natural Resources +14.4% per year for the past ten years
  8. Occidental Petroleum +14.3% per year for the past ten years
  9. The New Baker Hughes, a GE Company +12.2% per year for the past three years  
  10. Valero Energy Corp +10.1% per year for the past ten years
  11. The Old Baker Hughes Inc +9.9% per year for eight years excluding Golden Parachutes Pay
  12. Schlumberger Limited +9.6% per year for the past ten years
  13. Phillips 66 +5.4% per year for the past five years
  14. EOG Resources +5.1% per year for the past ten years
  15. Exxon Mobil +1.2% per year for the past ten years
  16. Anadarko Petroleum +1.1% per year for the past ten years
There have been many US Government laws enacted in the past two decades that have substantially increased income inequality expansion but the only highly effective US Government law enacted by either party in the past two decades that has substantially reduced income inequality expansion is Obamacare.

My objective is to get a better handle on just why the US and particularly here Texas has such massive continuing Income Inequality Expansion ..... it appears to be predominantly about the relative long-term annual pay raise percentages for the executives of a Company vs the many non-executive employees of a Company, coupled with the stock price appreciation subsequent to the time the company executives were rewarded in their pay with stock equity compensation.
To fix Income Inequality driven mainly by Company and its Board of Director choices on Percentage Annual Pay Raises, the US Government should step in and pass wisely-designed, simple but effective Fair Pay Raise Income Inequality Narrowing Company tax incentives for rewarding non-executive employees with fair pay increases ..... the carrot ..... and Company tax disincentives for rewarding executive employees with clearly excessively high pay increases ..... the stick.  I am certain ..... it is simple math ..... that this tax proposal would be very effective in substantially reducing the huge income inequality expansion that has occurred for decades in annual percentage pay raises between company executives and the rest of the company employees. 

And the continuing annual net tax revenues raised by the US Government here should be set up in a separate fund to be used only for wise additional income inequality narrowing initiatives.  This fund should be run by an outside group made up entirely of minorities harmed the most by Income Inequality Expansion of the past decades  .....all women, all blacks, all Latinos, all other non-white people, all past and present union members, all LGBTQ, all non-employee contract workers and all middle and lower income people of all ages, including those retired.

Also, the US Government should require all US Corporate Boards to include at least one worker representative and to exclude any Company Executive.

Further, the US Government should ban Golden Parachutes.

FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE
  Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec
Diamondback Energy 2018 2017 2017 2016 2016 2015 2015 2014 2014 2013
Top-Tier Total Total Total Total Total Total Total Total Total Total
Executive Comp Comp Comp Comp Comp Comp Comp Comp Comp Comp
$ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s
Stice CEO     10,549     10,282     10,282     22,148     22,148       9,718       9,718       6,597       6,597       2,165
Dick Chief Accounting Officer       3,082       3,088       3,088       2,320       2,320       2,423       2,423       1,928       1,928          578
Hollis COO       5,939       6,408       6,408       7,996       7,996       3,281       3,281       2,463       2,463          814
Pantermuehl Chief Engineer       5,167       5,539       5,539       6,559       6,559       3,120       3,120       2,463       2,463          776
Molnar Former EVP Exploration       4,724       5,339       5,339       3,746       3,746       2,352       2,352       2,150       2,150          658
 Totals      29,461     30,656     30,656     42,769     42,769     20,894     20,894     15,601     15,601       4,991
Annual % Change vs Prior Year -3.9% -28.3% 104.7% 33.9% 212.6%
5 Year Average Per Year % Change 63.8%
FYE FYE FYE FYE
Dec Dec Dec Dec
Diamondback Energy 2013 2012 2012 2011
Top-Tier Total Total Total Total
Executive Comp Comp Comp Comp
$ 000s $ 000s $ 000s $ 000s
Stice CEO       2,165       3,612       3,612       1,800
Dick Chief Accounting Officer          578       1,205       1,205          594
Hollis COO          814       1,793  N/A   N/A 
Pantermuehl Chief Engineer  N/A   N/A 
Molnar Former EVP Exploration  N/A   N/A 
White VP Operations          703       1,904  N/A   N/A 
 Totals        4,260       8,514       4,817       2,394
Annual % Change vs Prior Year -50.0% 101.2%
5 Year Average Per Year % Change 25.6%
7 Year Average Per Year % Change 52.9%  


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