Cum Clave analysis N.22 preview.
China is expected to control imports of thermal coal and increase purchases of high-quality coking coal to meet environmental protection requirements, executives of two of the country’s major steel producers said in the National Congress this week as coal from coke rose and while coke temporary stability is expected. The long compensation period also increases the costs of steel producers and increases international coal prices. Coking coal is a key raw material in steel production and lower quality coking coal increases costs thanks to the technology needed to reduce emissions in production. China has abundant thermal coal resources but lacks high quality coking coal, also being the world’s largest steel producer, imported 126.73 million tons of coal in the first four months of this year, including 27, 08 million tons were coking coal…………
Energy company CEOs on the Standard & Poor’s 500 index have $ 140 million in performance-based equity grants made in 2019 but expected to mature in 2021 and 2022, according to a Reuters review of their latest payroll reports.
Just over a third of the S&P 500 companies compare the relative TSR with a large business index. No energy company does it. Over 90% of the major US oil and gas companies use the relevant TSR to calculate long-term equity incentives.
The use of the relevant TSR has helped the leaders of the 15 major oil and gas producers to receive over $ 2 billion in compensation reported in the last decade.
Shale oil companies helped make the United States the world’s largest oil and gas producer, but that didn’t translate into profit growth.
Many investors have lost patience with the low returns of energy companies. Some investors are starting to complain and are telling energy companies to include the S&P 500 index in their target group. 42% of energy companies have agreed to limit premiums if they have negative returns, (let’s talk about compensation to CEOs). Executive compensation must reflect the long-term shareholder experience.
Global energy investments are expected to plummet by about 20% or $ 400 billion in 2020. The Paris-based IEA said that this could have serious repercussions on energy security and the transition to clean energy as the global economy he is recovering. The historical collapse of global energy investments is deeply worrying for many reasons. Global energy companies have cut investments and set aside plans to support their finances because of the crisis. The IEA has said that higher debt after the crisis will bring lasting investment risks….
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