Talisman executives to receive $28-million in Repsol deal

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Talisman Energy Inc.'s top five executives will collectively receive at least $28-million after Spain's Repsol SA takes over the long-struggling Canadian oil and gas outfit.

This number may rise if some of the senior executives resign within 12 months of the takeover, or are fired at any time.

Talisman chief executive Hal Kvisle is guaranteed the richest package: a $15.1-million goodbye, according to figures in the company's information circular tied to the takeover agreement. Paul Smith, the company's chief financial officer, will walk away with $3.5-million; Paul Blakeley, the man in charge of Talisman's Asia-Pacific business, will collect $3.2-million; Paul Warwick, who oversees action in the Europe-Atlantic, gets $3.2-million; and Robert Rooney, executive vice-president, corporate; will pocket $3-million.

By contrast, employees with stock options underwater – and there are likely a lot of those given the company sold for $8 (U.S.) per share – will get a penny for every otherwise worthless option they hold.

It is standard for senior executives to have so-called "change of control" agreements in their contracts. Mr. Kvisle's $15.1-million payout is tied to his performance as the company's chief executive over the past two years, Talisman spokesman Brent Anderson explained. Some of Mr. Kvisle's annual compensation came in the form of units rather than cash, Mr. Anderson said. The top boss could only access these performance-based units if he was terminated or the company changed hands.

Mr. Kvisle is entitled to another $12-million if Talisman or Repsol fires him. It is unusual, however, for the acquiring company to absorb the outgoing CEO.

Further, Mr. Kvisle is a fan of retirement. He retired as TransCanada Corp.'s chief executive in June 2010. He was a Talisman director when he stepped into the oil and gas company's corner office in September 2012. He expected to turn the company around and be out the door in three to six months. That stretched to 12 to 18. Mr. Kvisle was in charge for 28 months before he signed a deal with Repsol. Talisman shareholders must approve the deal in February before Mr. Kvisle's term is officially over.

Mr. Smith, Mr. Blakeley, and Mr. Rooney, are also eligible for more cash if they resign within a year after the Repsol deal closes, or are fired at any time by either Talisman or any company which takes over the Calgary-based firm. There is a collective $15.2-million earmarked for these scenarios.

Mr. Warwick's contract says he will receive about $5-million if Talisman or Repsol let him go.

Twelve of Talisman's board members will split millions of dollars amongst themselves thanks to the takeover. On the high end, California's Charles Williamson will take home about $2-million. The lowest payout clocks in at about $163,500.

Repsol in December offered $8 (U.S.) per share for Talisman. In July, however, the would-be acquirer was prepared to pay $13 per share, until it took a better look at Talisman's troubled joint venture with China's Sinopec in the United Kingdom's North Sea. Struggles at this project, coupled with falling oil prices, pushed the offer price south. Repsol made and revoked three offers before finally writing its fourth and final bid.