GENEVA: Vitol Group doubles the amount its employees earned last year as it notched up record profit of US$15.1bil (RM70bil) thanks to the wild swings in energy markets caused by Russia’s invasion of Ukraine.
The trading house paid an average of just over US$785,000 (RM3.6mil) each in salary and bonuses to its 3,311 employees, compared with the previous year’s average of US$394,000 (RM1.8mil), according to the company’s audited annual accounts seen by Bloomberg News.
That’s before taking into account the shareholder payouts to the roughly 450 top executives and traders who also own the company, and received US$2.5bil (RM11.4bil) in 2022 and another US$2.5bil in the first half of 2023, according to the accounts.
The figures highlight the vast windfall that commodity traders like Vitol have enjoyed on the back of the volatility caused by the invasion of Ukraine, and how – in an industry where many of the largest players remain privately owned – the benefits have accrued to a small number of individuals.
Together, top commodity traders Vitol, Cargill Inc, Glencore Plc and Trafigura Group made net profits of nearly US$50bil (RM228bil) last year, five times the average over the previous decade.
Among them, only Glencore is a public company.
Vitol’s net profit of US$15.1bil (RM70bil) in 2022 was a 258% increase on the previous year, itself a record, and more than the largest oil trader had made in the previous six years combined.
The US$785,000 (RM3.6mil) average compensation per employee compares favourably with Wall Street’s top investment banks – it is more than double the level at Goldman Sachs Group Inc and Morgan Stanley, whose average compensation per employee last year was about US$312,000 (RM1.4mil) and US$280,000 (RM1.3mil) respectively.
Vitol, which is known in the commodity trading industry for being relatively conservative in its financial management, mostly used its profits last year to shore up its balance sheet.
It reduced loans and borrowings by more than half to US$6bil (RM27bil), and almost doubled its shareholder equity to US$25.8bil (RM117.6bil).
A Vitol spokesperson declined to comment. — Bloomberg
