What a week…

August 19, 2005

Most people might be deep in vacation mode, but it’s been a busy week for Pioneer Natural Resources (PXD). Last weekend, Barron’s said the company was worth as much as $20 more a share. And on Tuesday, Forbes magazine reported that George Soros was snapping up shares.

But one thing that’s gone unreported are the new severance and change in control agreements the company inked with its top executives according to this 8-K filed on Wednesday. Though the company notes in the filing that it had severance agreements in place before, the new severance agreements substantially up the pay-outs. For example, under the old agreements, Chairman and CEO Scott Sheffield would have received only 1 times his base salary. Now he’ll get three. Ditto for President and COO Timothy Dove, who will now get 2.5 times his salary if he’s canned.

Still, it’s the change-in-control agreements that are even more interesting, given the renewed interest in Pioneer: each of the eight executive officers would receive 2.99 times their salary and target bonus and all of their shares under the company’s long-term investment plan would immediately vest. Sheffield and Dove, who were 52 and 48 respectively as of the last proxy, would also get full health insurance until they qualify for Medicare. Now, they too can go away on vacation, safe in the knowledge that if someone buys the company, they’ve got the equivalent of SPF 100 on.

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