CHICAGO: Chevron slashed Chairman and Chief Executive Officer John Watson’s compensation by 25 per cent after oil and natural gas output by the second-largest US energy producer tumbled to a five-year low.

Watson earned US$24 million in 2013, compared with US$32.2 million a year earlier, the San Ramon, California-based company said in a regulatory filing today. The pay package included US$1.77 million in salary, US$5.8 million in stock awards and options awards valued at US$9.2 million.

Watson oversaw US$41.9 billion in capital spending last year, a 23 per cent increase from 2012 that failed to reverse sliding production or add enough reserves to replace all the oil and gas Chevron pumped during the year. For this year, the company plans to pour almost US$40 billion into projects that Watson said last month will contribute to long-term production goals.

The stock’s 16 per cent gain last year underperformed the company’s largest US rivals, Exxon Mobil and ConocoPhillips. Yesterday, Chevron signaled that first-quarter profit dropped to the lowest since 2010 as output from wells headed toward an eight-year low.

(Bloomberg)