Murphy oil makes more cuts to capex, dividends and executive salaries

Arkansas-based Murphy Oil, whose CEO has been ill with the coronavirus and recently took a medical leave from his duties announced even more reductions this week in its remaining capital expenditures for 2020 as well as cuts in the salary of executives and dividends to shareholders. The reductions amount to a 48% cut in the capex budget.

The company’s board of directors also announced a 50% reduction in its quarterly cash dividend, moving from the previous quarterly dividend of $0.25 to $0.125. The board called the reduction “prudent” in light of the ongoing crude oil and natural gas market weakness.

The dividend is payable on June 1, 2020, to stockholders of record as of May 18, 2020.

The company also announced it has made an additional reduction in the 2020 capital plan down to the new midpoint of $780 million from the previously announced $950 million in March 2020. This represents a 46 percent decrease from the original guidance midpoint of $1.45 billion.

Concurrently, the Board of Directors has approved significant salary reductions for company executives. The president and chief executive officer’s annual salary has been reduced by 35 percent, while remaining executives received salary reductions of as much as 30 percent with an average of 22 percent. These changes are effective April 1, 2020.

The company also said its directors agreed to align with reductions to corporate executives’ salaries. Beginning in second quarter 2020, cash retainers for all directors will be lowered by 35 percent, with the chairman reducing his cash retainer by 70 percent.

“Murphy recognizes the reality of the current situation in the commodity markets, and we believe the reduction in dividends, capital expenditures, salaries and retainers are prudent steps to sustain the company for the long term,” said Claiborne P. Deming, Chairman of the Board for Murphy Oil Corporation. “We will continue to review our dividend and other items throughout the course of the year and make further adjustments if warranted.”

Source: Business Wire