During the first year of the COVID-19 pandemic, the compensation of CEOs from America's largest oil companies increased significantly due to stock-heavy pay packages that surged in value. Despite a sharp decline in oil and gas consumption and the loss of one in six jobs in the industry during the pandemic, an analysis of stock-based pay granted to CEOs at 20 U.S. oil and gas companies in 2020 showed that their compensation more than doubled by 2023.

Stock-based CEO pay in the S&P 500 Energy Sector Index is now worth nearly $500 million, up significantly from initial estimates of $187 million. Critics argue that the system over-rewards executives amid mass layoffs and refinery closures by linking pay too closely to external factors such as oil and gas price swings, rather than long-term financial performance.

The rise in CEO pay distorts the pay ratios that companies must disclose to investors. For instance, Occidental Petroleum Corp reported in 2020 that CEO compensation was 104 times higher than median employee pay, but with stock gains over the past three years, it was actually 230 times higher.

Most energy CEOs also have protection against market downturns, as about 90% of energy companies measure stock performance against others in the same industry. This means executives can receive large payouts even if their companies' stocks lose value. Some CEOs are also paid dividends on unvested restricted stock they technically do not yet own.

Many energy companies are under investor pressure to reform CEO pay, with some capping stock awards linked to total shareholder return if investors lose money. However, some believe that reforms on payouts linked to negative shareholder returns still do not go far enough.