ADELAIDE, April 28, 2026, 07:32 (ACST)
Santos Limited disclosed that Chief Executive Kevin Gallagher received 665,283 share acquisition rights, an equity award with a notional value of about A$5.1 million based on the company’s Monday close of A$7.65. The rights were issued at nil consideration after shareholder approval earlier this month, a filing showed.
The timing matters because Santos is trying to turn two large growth projects into cash flow. Barossa LNG, or liquefied natural gas, is due to restart its production ramp after commissioning problems, while first sales oil from the Pikka project in Alaska is expected in coming weeks.
The grant also keeps executive pay in focus. Santos shareholders backed the rights award with 94.55% of votes cast in favour, but the remuneration report drew 22.97% opposition, close to the 25% level that would count as a first strike under Australia’s executive-pay rules.
Share acquisition rights, or SARs, are not the same as ordinary shares on grant. Santos’ notice of meeting said the awards carry no dividends, voting rights or legal share ownership until they vest, and that unvested rights can lapse if performance conditions are not met.
HESTA, the Australian pension fund, voted against the pay report and against the grant to Gallagher. HESTA CEO Debby Blakey said pay outcomes for Gallagher were “not adequately justified,” citing company performance and the breakdown of another acquisition proposal, and said the fund would keep pressing Santos on transition projects, pay hurdles and succession planning. HESTA
Santos’ operating case was set out last week. The company reported first-quarter production of 22.5 million barrels of oil equivalent, sales revenue of about $1.27 billion and free cash flow from operations of about $383 million, while keeping full-year 2026 guidance unchanged. Gallagher said the base business “continues to perform reliably” and that Pikka first sales oil was expected “in the coming weeks.”
Analysts have looked past some of the near-term misses. Saul Kavonic, head of energy research at MST Marquee, told Reuters Santos shares had been supported by “supportive oil price moves,” while investors were also looking beyond the revenue miss toward the start-up of Barossa and Pikka after delays. Reuters
The competitive backdrop is not quiet. Santos is Australia’s No. 2 oil and gas producer, and its LNG timing is being watched alongside supply risks at Woodside and Chevron-operated Australian plants after cyclone disruptions hit large LNG assets in March.
Santos shares closed 1.8% lower on Monday at A$7.65, giving the company a market value of about A$24.8 billion. That left the stock below its recent high but still near the upper end of its 52-week range.
But the downside is clear. The value of Gallagher’s new rights depends on vesting and the share price, while Santos’ broader rerating case depends on Barossa and Pikka starting cleanly, oil and LNG prices holding up, and investors staying comfortable with capital allocation and pay. A delay, weaker commodity prices or more governance pressure would change that quickly.
