Norwegian oil company Statoil has quietly confirmed that its low-profile executive John Knight will be resigning his post at chief strategist on January 1, 2019. He’ll be taking with him a severance pay package that makes the many others paid out by Statoil, as part of its cost- and staff-cutting in recent years, pale in comparison.
Newspaper Dagens Næringsliv (DN) reported that Knight’s looming departure was reported on page 113 of Statoil’s recently published annual report. His resignation is said to be based on “a mutual understanding,” with DN setting the value of his pay deal and severance during the next three years at around NOK 33 million (USD 3.9 million).
“He has an agreement that expires in 2019, and it won’t be extended,” Statoil’s information director Bård Glad Pedersen told DN. “He wants to work for the company with all his strength until 2019, but he doesn’t want to continue after that.”
DN reported that Knight’s current base pay is being raised from GBP 600,000 to GBP 630,000 this year and next year. Until now, Knight has had variable pay that, with a bonus, can amount to as much as 150 percent of his base pay. DN reported that nstead of getting a bonus in addition to his base pay, Knight will receive an “extra” payment of GBP 535,000 this year and next year. And even though he’ll officially quit as of January 1, 2019, he’ll still be paid GBP 600,000 in 2019, according to DN. In addition come pension payments of around NOK 1.3 million in 2017 and 2018.
It all adds up to around GBP 3.2 million pounds, or NOK 33.4 million at current exchange rates. Knight’s pay has, Pedersen acknowledged, defied standards set for companies in which the Norwegian state has ownership interest. Pedersen said the discrepancy stemmed from the fact that Knight is a British citizen who lives in England and was recruited to Statoil from abroad.
Knight, a law graduate of Cambridge University, joined Statoil in 2002, rising to become executive vice president for global strategy and business development, a post he’s held since January 2011. DN noted that he’s been behind many of Statoil’s controversial, successful and less successful ventures tied to its aggressive international expansion in recent years, especially in North America. That included the company’s highly debated entry into oil sands in Alberta, Canada, which Knight himself recently admitted was not a success. Statoil sold out of oil sands project last year, much to the relief of environmentalists who had fought it fiercely.
Knight has long been Statoil’s most highly paid employee, earning more than the company’s Norwegian CEO because of higher executive pay levels in the UK. He took a pay cut last year, to USD 1.8 million from the USD 2.1 million reported the year before, but still more than CEO Eldar Sætre.
The British executive, born in 1958, had been viewed as a candidate to take over as Statoil’s CEO when Helge Lund stepped down in 2015. The job instead went to Statoil veteran Sætre.