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As oil stocks have lagged behind the oil price rally, a growing number of U.S. oil companies are now tying the salaries and short-term bonuses of their top executives to shareholder returns rather than to production growth...
While there is substantial room for further adoption of debt-adjusted per share growth and corporate returns incentives, this is a clearly positive signal for improved U.S. producer discipline.
For those that resist adoption of value-based strategies and CEO pay incentives, their equities will remain decoupled from crude oil prices.
Most tight oil companies are adhering to tighter investment budgets. Some have even changed compensation incentives for the CEOs to more value-based metrics.