LONDON, (The Southern African Times) – The world’s largest independent oil trader, Vitol Group, has shared part of its huge profit as it paid out a record $2.9 billion to its executives and employees through share buybacks, so far this year.
This follows the record results which was declared by the oil firm in 2020, its best so far, despite the outbreak of the coronavirus pandemic which led to global lockdowns and affected oil demand.
According to Bloomberg, Vitol recorded a net profit of $3.2 billion in 2020, which is higher than the previous record of $2.3 billion that it achieved in 2009 and 2019.
Most of the income in 2020 were earned during the horrific second quarter when oil prices went negative. Oil demand plunged during that period, allowing traders to buy cheaper crude and store it, while further selling oil at higher prices in the futures market to lock in profits.
The $2.9 billion buyback done so far this year, is more than the $2 billion share buyback achieved in 2020. Vitol’s previous record for annual buybacks was $2.2 billion.
The buyback is in addition to the regular salaries and bonuses. Vitol’s employee remuneration bill increased by 67% to $1.23 billion in 2020, which comes to an average of about $495,000 when spread across each of its 2,480 employees.
Vitol’s record performance comes during a change in the firm’s leadership. In 2018, Russell Hardy replaced longtime CEO Ian Taylor, who died the previous year with other top executives, such as Mike Loya, who ran the US business from Houston, and Kho Hui Meng, who headed Asia, retiring in 2020.
What you should know
Vitol, a privately held company, is reported to have paid out about $19 billion over the past 17 years to its partners, which is usually distributed to its 350 top employees through share buybacks and is its main method of rewarding them.
