The Board of Directors of the oil company YPF recently approved a salary increase close to 40% above inflation for its members during the Assembly held on Friday the 26th. This proposal was accepted by 98.6% of the votes, including those of the chief and vice chief of staff, Nicolas Posse and Jose Rolandi, respectively. The directors of YPF represent the interests of the shareholders, which include the State (51%) and private shareholders (49%). Despite this share structure, the company operates as a private limited company (SA) without financial contributions from the national State.
YPF derives 80% of its income from the sale of fuel and can use its reserves in case of losses. Last year, the company reported a negative accounting result of $1.277 billion, mainly due to the revaluation of its conventional gas and oil fields for sale. However, the adjusted EBITDA before interest, taxes, depreciation, and amortization was positive at $4.058 billion. The company hired a consulting firm to determine that the compensation paid to directors was below market standards, necessitating the salary increase.
The energy industry in Argentina has been less affected by the income crisis than other sectors due to strong oil prices. In fact, oil unions recently closed a parity agreement with an impressive increase in wages year-on-year compared to other industries. However, despite this positive outlook for YPF’s operations in this area, there have been controversies over director salaries that have led to criticism from some stakeholders.
The General Assembly approved payment fees for directors and members of YPF’s Supervisory Commission for fiscal year 2024 amounting to over $10 billion. This represents a significant increase compared to previous years due to higher market conditions.
The Board of Directors now includes additional members with varying compensation levels compared to last year’s board members.
Despite these controversies over director salaries and criticisms from some stakeholders regarding their perceived excessive levels, YPF continues its operations and investment activities while working towards improving transparency and accountability in all aspects of its business practices.
Overall, YPF’s successful performance in several areas such as generating revenue through fuel sales and managing expenses efficiently indicates that it is well-positioned to continue operating effectively in Argentina’s competitive energy marketplace.
However, it remains essential for YPF management to address concerns about director salaries further and find ways to strike a balance between maintaining competitive compensation packages while keeping stakeholders informed about financial decisions made by board members representing their interests on behalf of investors.