Suncor Energy Inc. SU-T paid former Imperial Oil chief executive officer Rich Kruger $36.8-million in 2023, his first year at the company.
Mr. Kruger, 63, joined Suncor in April of 2023 after pressure from an activist investor, stemming from lacklustre fiscal performance and a spate of safety incidents and worksite fatalities, led to the resignation of former CEO Mark Little the prior year. Mr. Kruger retired from Imperial Oil at the end of 2019 after a 39-year career with Exxon Mobil Corp. XOM-N, Imperial Oil’s U.S. parent company.
His Suncor sign-on package, disclosed in the company’s proxy circular to shareholders, included a grant of restricted stock valued at $23.11-million. Suncor said the award was “a direct replacement of the future compensation forfeited as a result of coming out of retirement to lead Suncor.”
When Mr. Kruger retired from Imperial Oil in 2019, the company said he had accumulated pension benefits it valued at just under $18-million. At the end of 2019, he also held unvested restricted stock in Imperial Oil and Exxon Mobil that was worth $31.3-million.
Suncor said Mr. Kruger’s first-year pay also included a stock award of options and shares valued at $8.78-milion, plus $2.31-million in deferred share units. Suncor gave him the DSUs, which he cannot sell until he leaves Suncor, in exchange for his agreement not to participate in the Suncor pension plan.
He received $970,000 in salary for his partial year of work and a $1.63-million annual bonus.
“Since joining Suncor in April, 2023, he has moved quickly, decisively and effectively to streamline the organization, establish a strong focus on the fundamentals, deliver on the company’s commitments to improve safety and operational performance and return value to shareholders,” the company told shareholders in its discussion of executive compensation decisions. “Mr. Kruger also continued to improve the company’s asset portfolio with the completion of key strategic divestments and acquisitions.”
The company did not return requests for comment for this article.
The Calgary-based energy giant cut 1,500 jobs last year under Mr. Kruger, who told investors during a November conference call Suncor would continue to look for areas to trim as part of a wider efficiency push to save $450-million a year.
Mr. Kruger has made clear that, under his leadership, Suncor would delve into all areas of its operations to find ways to improve its financial performance. No part of the business has been spared a review – including Suncor’s philanthropic arm, which has dialled back its support to non-profits.
The overhaul of the foundation came after Suncor reported that its fourth-quarter oil production was at its second-highest level ever.
Aside from cutting jobs and charitable donations, Suncor under Mr. Kruger’s watch has become more focused on its core operations, safety and reliability.
As a newly minted CEO, he told an investor conference call in August, 2023, that Suncor needed to return to its roots as an oil company and focus on the business of low-cost production and profits, rather than the longer-term energy transition.
His comments suggesting that the company would not prioritize long-term energy transition became something of a political football, with federal Environment Minister Steven Guilbeault saying the remarks demonstrated why the government needed to regulate climate action in the oil and gas industry.
Mr. Kruger ended up testifying at the natural resources parliamentary committee in Ottawa as a result, where he said Suncor was committed to reducing its greenhouse gas emissions to net zero by 2050.
Suncor’s poor performance compared with oil sands peers made it the target of activist U.S. hedge fund Elliott Investment Management LP in 2022. Part of the reason for Mr. Little’s downfall was the company’s dismal safety record, including five workplace fatalities between December, 2020, and July, 2022. Mr. Little made $15.63-million in 2022, his final year as CEO, including $5.97-million in severance.
In his message to shareholders in the company’s 2023 annual report, Mr. Kruger said 2023 “was the safest year in the company’s history. We had no life-threatening or life-altering injuries and our year-over-year lost-time injuries were down nearly 50 per cent.”
Suncor shares returned 3.7 per cent in 2023, according to S&P Global Markey Intelligence. Several energy-sector members of the S&P/TSX 60 Index saw their shares fall in 2023.
David Milstead
Emma Graney