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Devon Energy CEO's Pay Rises Beyond $16 Million

Oil and gas producer Devon Energy Chief Executive J. Larry Nichols' total pay package rose 5.5 percent last year to $16.7 million, according to an Associated Press calculation of figures in a Securities and Exchange Commission filing Friday.

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Nichols' total 2008 compensation was up from the $15.8 million he received in 2007.

His salary climbed 17 percent to $1.4 million and his bonus jumped 15 percent to $3 million. Nichols also received $339,558 in "other" compensation, including $214,500 in company contributions to his deferred compensation savings plan, $96,778 for use of the corporate jet, $14,478 in life insurance premiums and $13,800 in contributions to Nichols' retirement plan.

Oklahoma City-based Devon also gave Nichols, 66, options and restricted stock awards valued at $12 million when they were granted on Dec. 8, 2008. Since then, the value of these awards has declined as Devon's stock has shed about 22 percent.

The company said its compensation program aims to reward and retain effective leaders while adapting to unexpected industry developments and volatility in the commodities market.

Like its industry peers, Devon took a beating in 2008 as commodity prices plunged and demand for energy products fell as unemployment mounted and businesses and factories scaled back operations. Commodity price declines forced Devon to recognize significant charges related to write-downs on inventory, which deeply hurt earnings results.

For the full year, Devon reported a loss of $2.15 billion, or $4.85 per share, compared with earnings of $3.61 billion, or $8 per share, in 2007. Excluding items, Devon earned $4.4 billion, or $9.91 per share. Revenue rose 33 percent to $15.21 billion.

Devon's share price fell 26 percent in 2008 to close the year at $65.71.

The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the past fiscal year. It includes salary, bonus, performance-related bonuses, 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, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.