Link between energy firms and their CEO’s pay

NEW YORK: Oil and gas companies continue to link executive pay to the discovery of energy resources the world can’t safely burn, potentially jeopardising shareholder value, according to a new report.

As many parts of the world shift toward a low-carbon economy, energy companies may be at increasing risk “of over-investing, and wasting capital on projects that turn out to deliver poor returns and destroy value,” the report by the Carbon Tracker, a UK nonprofit focused on climate risks to fossil-fuel companies, finds. Companies that encourage executives to discover and produce new fossil fuels tend to see poorer stock performance than those who base compensation on financial returns and cost metrics, the study says.