Australia's Santos offers incentives to CEO to stay on amid Woodside CEO search

[SYDNEY] Santos Ltd said on Monday it will give Managing Director and Chief Executive Officer Kevin Gallagher one-time growth incentives - a move widely seen as an attempt to ensure that he doesn't jump ship to rival Woodside Petroleum.

Woodside is seeking a new CEO to succeed Peter Coleman, who retires this year, and Mr Gallagher has been seen as the possible replacement. He had missed out on the top job at Woodside in 2011.

The incentives will be in the form of share acquisition rights with a face value of A$6 million (S$6.12 million), Santos said, adding that it is to ensure Mr Gallagher sees through the successful delivery of its major growth projects and energy transition strategy to 2025.

"There is a 'Kevin premium' factored into the Santos share price given that the management is well regarded by the market.

That is at risk of being lost if Kevin were to move to Woodside," Credit Suisse analyst Saul Kavonic said.

Mr Gallagher has been at the helm of Santos since 2016, and the gas producer had reported total annual CEO compensation of US$4.2 million for the year to December 2020.

"Regardless of how seriously the Woodside Board considered his candidacy, it appears Kevin has managed to leverage the possibility of his departure to gain more incentives from the Santos Board to stay on, as any good dealmaker would, " Mr Kavonic said.

REUTERS