Executives And Insiders At CA Big 5 Refiners Cashed Out $590 Million In Company Stock During 2022 In Wartime Profiteering, Says Consumer Watchdog

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Mar 15, 2023, 11:00 ET

LOS ANGELES, March 15, 2023 /PRNewswire/ -- Top executives and insiders at California's big five oil refiners cashed out $590 million in stock in 2022, according to a review of filings with Securities Exchange Commission by the nonprofit Consumer Watchdog.

Chevron, which is the only one of the five oil refiners to fail to comply with a new state law (SB 1322) requiring it to disclose its California gasoline profits monthly, paid out $150 million to its executives and directors.

Five refiners—Chevron, Marathon Petroleum, Valero, PBF Energy and Phillips 66—make 98% of the state's gasoline. Together, they tripled last year's profits to $75.4 billion over the year before and almost quadrupled them in the first nine months of 2022. Californians pay the highest gasoline prices in the nation. Oil refiners make more profit in the state than anywhere else.

29 oil executives and directors at the five oil refiners who took home more than $1 million each accounted for $231 million of the $590 million payout in 2022. All told, 60 executives and directors made $240 million. The Slim Family of Mexico, insiders by virtue of meeting the ownership threshold of 10% of PBF Energy stock, unloaded $350 million worth of stock as the Ukrainian war broke out. The war allowed refiners to artificially inflate the price of gasoline, but refiners' costs did not go up, leaving them with a windfall.

"Californians pain at the pump during 2022 put more than a half billion dollars into the pockets of five dozen executives and directors and one major insider," said Liza Tucker, Energy Project Director of Consumer Watchdog. "There is no greater argument for Governor Newsom's price gouging penalty to rein in this outrageous greed and profiteering and to keep the dollars in the pockets of hard working Californians."

The California legislature is currently considering SBX1 2 (Skinner) that would put a windfall profits cap on how much oil refiners can make in profit per gallon. Consumer Watchdog said the disclosure on stock payouts should hasten the legislature's deliberations.

Among the findings of Consumer Watchdog's review of SEC Form 4s:

At Chevron alone, executives and directors cashed out $150 million worth of stock in 2022.
Chevron CEO Mike Wirth unloaded more than $10 million worth of stock in 2022, according to SEC filings, on top of a raise that brought his base salary to $1.85 million. Executive Vice President James Johnson alone offloaded $60 million in Chevron stock trades. Other executives who took home between $5 million and $10 million: Vice President Pate Hewitt $19.5 million; Executive Vice President Joseph Geagea $16.6 million; Vice President Pierre Breber $8 million; Vice President Mark Nelson $9.8 million; Director Enrique Hernandez: $6.6 million; Vice President Colin Parfitt $6 million and Vice President Rhonda Morris $5 million.
PBF Energy executives, including the CEO, division presidents and vice presidents cashed out more than $12 million, according to SEC filings. Four of those PBF senior executives including the chief financial officer and general counsel had not previously sold off shares except to satisfy taxes or the cost of exercising their stocks.
At Marathon Petroleum, executives and directors cashed out more than $48 million.
Valero executives and directors cashed out $24 million.
Executives at Phillips 66 took home just $4.8 million in stock sales with $3 million of that sum going to the CEO.

Institutional investment advisor VerityData found last April that more U.S. energy executives had been selling rather than buying stock at the fastest pace in a decade. Chevron Corp. had the highest selling volume since 2008.

While base salaries are in the millions of dollars for top oil executives—and a lot are getting raises in the wake of record profits—incentive compensation in the form of stock awards makes up the bulk of their compensation. That includes options allowing executives to buy at set prices and turn around and sell high on the market, direct awards of stock or its cash equivalent upon vesting, and employee discounted stock purchase plans.

"Millions of people making our state's minimum wage forked out 70% of just one day's take home pay to fill an average gas tank at $6 a gallon," said Tucker. "It's unconscionable that minimum wage workers would have to spend 13% of their yearly take home pay to finance $590 million in stock gifts to Big Oil executives."

New stock grants to executives were also awarded by directors. For 2023, Chevron directors approved a grant of 47,460 performance shares, 92,800 stock options and 23,730 standard restricted stock units to CEO Wirth, according to a Consumer Watchdog review of Chevron's January 2023 Form 8-K filed with the SEC. Chevron CFO Pierre Breber and another executive vice president, Mark Nelson, were also awarded thousands of performance shares, stock options and restricted stock units.

The following 29 executives at the five refiners cashed out $1 million worth of stock and up for the lion's share of $240 million in executive and director stock sales.

Chevron's Top Profiteers Cashed $150 Million In Stock: