Cairn Energy boosts chief executive Simon Thomson's pay for 2016 but slashes long-term incentives

 
Courtney Goldsmith
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Cairn's boss will see a huge reduction in long-term incentives from 2017 (Source: Getty)

The chief executive of Cairn Energy received a bumper 61 per cent pay increase in 2016, but the oil firm has slashed potential long-term incentives for future years.

Simon Thomson received £2.1m for 2016 compared with £1.3m the previous year. The jump was mainly down to increases to long-term incentives as Thomson was awarded £961,095 in 2016 compared with £217,975 the previous year.

The Edinburgh-based firm has proposed a new remuneration policy, which, if shareholders approve, will see Thomson's annual bonus opportunity increase from 100 per cent of his salary to 125 per cent.

However, in a move that echoes BP's remuneration policy shake up, the oil explorer said it plans to introduce a new long-term incentive plan which will slash the total annual opportunity from 400 per cent of his base salary to just 200 per cent plus a 50 per cent "kicker", conditional on certain performance metrics.

Jackie Sheppard, chair of the remuneration committee, said: "The committee has formulated a new remuneration framework which is intended to provide a better balance between driving short-term performance and rewarding long-term success."

The independent oil and gas explorer expects first oil from its assets in the Shetland Islands this year. The wells are expected to produce 25,000 barrels of oil equivalent per day.

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