Marathon Oil CEO Pay Triples in 2011 Amid Refining Spinoff

Marathon Oil Corp. (MRO), the U.S. oil producer that spun off its refining business last year, paid Chief Executive Officer Clarence Cazalot three times more in 2011 than a year earlier after the company’s stock price surged.

Cazalot’s total compensation was $31.5 million last year, compared with $10.2 million in 2010, Houston-based Marathon Oil said in a proxy filing with the U.S. Securities and Exchange Commission today.

The biggest reason for the jump was $18.8 million from a non-equity incentive plan in 2011, compared with zero a year earlier, according to the filing. The award was based on Marathon Oil’s share-price and dividend-per-share performances compared with peers.

The board decided in December 2010 to accelerate the vesting of outstanding performance units, with an effective date of June 30, 2011, when the refining spinoff occurred, Lee Warren, a Marathon Oil spokeswoman, said in an e-mail today. The acceleration will reduce potential total compensation for periods that end in 2012 and 2013, she said.

The company “had a remarkable year in terms of both operational performance and stock performance,” Warren said. Marathon Oil rose 42 percent in the first six months of last year. The new refining company is Marathon Petroleum Corp. (MPC)

Cazalot, who also is chairman of Marathon Oil, had a salary of $1.4 million in 2011, a bonus of $3 million and option awards of $6.4 million, the proxy filing showed. He had $1.6 million from a change in pension value and certain deferred compensation, and $276,207 in other compensation.

Marathon Oil rose 1.7 percent to $33.53 at the close in New York. The stock has climbed 15 percent this year after rising 30 percent during 2011.

To contact the reporter on this story: Edward Klump in Houston at eklump@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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