Marathon Oil chief gets $8.3M

Cazalot's pay package fell from the $13.1 million he got in 2007, according to Marathon's filing with the Securities and Exchange Commission.

Cazalot, 58, received performance and other bonuses totaling $3.78 million in 2008, down from the $6.26 he was awarded the year before, when the company's stock price rose 26 percent.

In addition, Cazalot received stock options valued at $2.9 million when they were granted Feb. 27. In 2007, Cazalot's stock options were valued at $5.2 million on their grant date, in part from a higher share price at the time.

The remainder of Cazalot's 2008 pay package was a $1.4 million salary, up from $1.3 million in 2007, and $275,745 of "other" compensation, the bulk of which was contributions to deferred compensation plans.

The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC.

Marathon Oil Corp. is the fourth-largest U.S. integrated oil company, meaning it's involved in exploration and production as well as refining and marketing. The nation's top three are Exxon Mobil Corp., Chevron Corp. and ConocoPhillips, respectively.

Cazalot, Marathon's CEO since 2002, was by far the Houston-based company's highest-paid official among six company executives listed in the report.

Marathon said it based part of Cazalot's compensation on certain company metrics, including the performance of its exploration and production and refining operations against peers. In one category, Marathon said it ranked fourth among major oil companies in adjusted net income per barrel of oil equivalent last year, topping its own expectations.

For all of 2008, Marathon reported net income of $3.52 billion, or $4.95 a share, down from the $3.96 billion, or $5.69 a share, it earned in 2007. Full-year revenue rose to $78.6 billion from $65.2 in 2007.

Like others in the industry, Marathon's shares took a beating in 2008, falling more than 50 percent to close the year at $26.60. They've fallen even more in 2009.

Oil and gas producers large and small are scaling back operations as they prepare to ride out a recession that's crushing energy demand around the world. Marathon is no exception.

The company has announced a 2009 capital spending budget of $5.7 billion, 24 percent below 2008 spending levels. Marathon noted the difficult market conditions in its proxy, saying that "executing on our business plan was and will continue to be challenging."