Media release

Santos’ CEO growth bonus remains in place as board faces potential second strike

The Australasian Centre for Corporate Responsibility​ (ACCR) is commenting on the release of Santos’ 2022 Annual Report, including its remuneration report. The company faces a ‘second strike’.

Commenting on the update, Alex Hillman, Lead Analyst at the Australasian Centre for Corporate Responsibility (ACCR) said:

“Santos’ remuneration report states that the board has been ‘engaging widely’ with shareholders following the embarrassing first strike on remuneration at the 2022 AGM. However the controversial CEO Growth Incentive remains in place, with the only adjustment making it easier for Mr Gallagher to meet the deliverables.

“While Santos expresses ‘disappointment’ with the REM strike, it still continues to ignore what investors are most concerned with: that the bonus structure is fundamentally flawed and it must be fixed.

“Shareholders will certainly be raising questions over whether the $6 million bonus is excessive and leading to shortcuts in due diligence and execution.

“Notably, company performance relating to traditional owner relationships was marked down but still deemed within the threshold worthy of reward. This is incomprehensible given the full Federal Court confirmed in December 2022 that the company failed to consult Tiwi Islander people for its Barossa project drilling activities even though it knew of their existence.[1]

“Other sources of pain for the company’s leadership also got a nod in the remuneration report, including delays in decommissioning end of life projects and the oil spill at Varanus Island, which a whistleblower states caused the death of multiple dolphins.

“Whilst an ‘ongoing incident review and independent investigation’ into the Varanus Island spill continues, the portion of executive rewards relating to the Environment KPI will be withheld. It should not take a whistleblower to reveal allegations via the Federal Parliament for Santos to properly assess its performance.

“Whilst oil and gas peers have been making money hand over fist, Santos’ delivered a total return to shareholders of just 10%. Its peers however, returned between 20% and 87%. The 2022 company scorecard performance was also the worst for at least five years. * See note below

“Santos’ performance is bearing the hallmark of a company which is over-committed, over promising and starting to make serious judgement errors.”

*Note: For clarification (not included in the original media release): total return to shareholder calculated on a US dollar basis


Santos peers assessed were Beach Energy, Woodside Energy, Shell, bp, Exxon and Chevron.

  1. Refer for example to para 93 of the judgement of Justices Kenny and Mortimer:
    “The material before the delegate demonstrated that Santos was well aware of the presence of Tiwi Islanders, and the traditional connection to their islands, the sea around them and the marine resources within them. However, it had adopted a [wrong] view of the operation of reg 11A(1)(d) which put them outside its obligation to consult.” Santos NA Barossa Pty Ltd v Tipakalippa [2022] FCAFC 193 ↩︎

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