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Conoco Awards Employees Worldwide $52 Million in Special Compensation as Part of Annual Employee Profit Sharing Program

Submitted by: Conoco Inc.

Categories: Human Resources & Diversity1

Posted: Feb 07, 2002 – 11:00 PM EST

 

Feb. 07 /CSRwire/ - Conoco's 11,000 non-management employees worldwide will receive almost $52 million in special compensation awards for 2001 performance results. Employees will receive payouts averaging 9.6 percent of their annual base salaries. This represents the second-highest payout in the seven-year history of the company's employee profit sharing program, called "Conoco Challenge."

Conoco Challenge links compensation to company and business unit performance and cash flow. Adjustments are made based on a three-year average of Conoco's total shareholder return versus industry peers.

Conoco reported 2001 net income before special items of $1.8 billion, with annual revenues of $39.5 billion. The company's average total shareholder return for the three-year period 1999-2001 was approximately 13.7 percent, with Conoco substantially outperforming the S&P 500, which averaged a negative 2.3 percent during the same time period. Conoco's cash generated from operations totaled $3.1 billion.

Chairman and CEO Archie W. Dunham said, "Conoco had another outstanding year, the second-best in our history, achieving record earnings in downstream and continuing several years of significant growth in oil and natural gas production, which was up 18 percent for the year.

"These successes are tremendous accomplishments for our business units worldwide, and a tribute to our employees and the major contributions they make toward Conoco's long-term success. They deserve to share in the company's profitability."

Besides the cash generation, operating income and total shareholder return components of Conoco Challenge, bonus payouts are impacted by qualitative performance measures related to the company's core values of safety, environmental responsibility, business ethics and valuing all people.

The first Conoco Challenge payouts were awarded in 1996 based on the company's 1995 performance. The program includes most employees through senior professional and supervisory levels. Conoco has around 19,000 full-time employees worldwide, with more than 11,000 of them participating in the program.

Conoco's approximately 1,500 senior managers participate in a separate variable compensation program based on similar financial performance targets, plus personal leadership components. The company's remaining employees, such as retail, have their own, individual commission or bonus programs.

Since Conoco Challenge's inception, participating employees worldwide have celebrated what has come to be known in the company as "Pie Day." The name is derived from the concept of "sharing a piece of the financial pie." Pie Day is celebrated in a number of ways around the world on or near the day that payouts are announced.

Past Pie Day celebrations have included a giant pie lowered from a crane at the corporate headquarters, a high-school-style pep rally and a variety of other pie-themed events tailored to local customs, ranging from crawfish pie in Louisiana to Dutch apple pie in The Netherlands.

Last year, the company considered holding its first pie recipe contest, but the concept was voted down as too ordinary. Instead, it held a pie story contest, with an emphasis on a personal anecdote, rather than a recipe. Hundreds of employees from around the world submitted entries, sharing stories about wonderful family traditions, humorous mishaps, even tales of love and marriage.

Dunham added, "Conoco's superior financial and operating performance are the framework of the company, but it's our employees and their creative thinking, determination, intellect and hard work that are responsible for Conoco's success."

Conoco is a major, fully integrated energy company active in more than 40 countries. http://www.conoco.com

Conoco Challenge Fact Sheet

"Sharing a Piece of the Financial Pie"

-- Conoco's 11,000 non-management employees worldwide will receive $52 million in special compensation awards for 2001 performance results, as part of the company's annual employee profit sharing program called, "Conoco Challenge."

-- Conoco Challenge rewards employees with cash payouts over and above their annual base salaries, reflecting company and business unit performance in three targets areas: cash from operations (CFO); after-tax operating income (ATOI); and total shareholder return (TSR).

-- This year, eligible employees worldwide will receive payouts averaging 9.6 percent of their annual base salaries, the second-highest payout in the bonus program's seven-year history.

-- Conoco has around 19,000 full-time employees worldwide, with more than 11,000 non-management employees eligible for Conoco Challenge. The company's approximately 1,500 senior managers participate in a separate variable compensation program, and others, like retail employees, have their own, individual bonus or commission programs.

-- Conoco reported 2001 net income before special items of $1.8 billion -- the second-best year in the company's 127-year history. Annual revenues were $39.5 billion.

-- Conoco's total shareholder return for the three-year period 1999-2001 was approximately 13.7 percent, with the company substantially outperforming the S&P 500, which averaged a negative 2.3 percent during the same time period. Conoco's cash generated from operations totaled $3.1 billion.

-- Besides the cash generation, operating income and total shareholder return components of Conoco Challenge, bonus payouts are impacted by qualitative performance measures related to the company's core values of safety, environmental responsibility, business ethics and valuing all people.

-- More than $1 million of the total $52 million in special compensation for this year is attributed to overall high-level achievement in the qualitative performance areas of safety, environmental responsibility, business ethics and valuing all people.

-- Since Conoco Challenge's inception in 1996, participating employees worldwide have celebrated what has come to be known as "Pie Day." The name is derived from the concept of "sharing a piece of the financial pie." Pie Day is celebrated in a number of ways around the world based on local customs, on or near the day that payouts are announced.

For more information, please contact:

Wendy Olson Conoco
Phone: (281) 293-1066

 

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