Schlumberger Limited

Proxy released 2/19/2015

Pay is down, but issues remain: The pay package for CEO Paal Kibsgaard, is down from last year, with significantly lower stock awards, as well as lower option grant and annual incentive pay for a decline in total disclosed pay of over $4 million. However, the summary compensation table reports a change in pension value of $1,765,398. As noted in the footnotes this represents a change in actuarial value, not a current payment.  The footnotes indicate the Kibsgaard received $134,904 in unfunded credits to the Schlumberger Supplementary Benefit Plan. The current value of 47-year-old Kibsgaard’s non-qualified deferred compensation, in the five separate plans in which he participates, is over $.4.4 million. These tax-advantaged retirement savings allow for vast wealth accumulation for the company employee who is least likely to face retirement insecurity.

We also note that the company’s Performance Share Units allow for accelerated vesting in the case of a merger or consolidation, a practice many shareholders object to because it creates incentives for business transactions that may not benefit shareholders.

Finally, while not a compensation issue, it is interesting to note that while many companies adopt the governance practice of separating the positions of chairman and CEO, Schlumberger will be re-combining them after the impending retirement of the current board chair.