In a signal that top management expects to see results put ahead of compensation, James Mulva, CEO of ConocoPhillips, has volunteered to give up some of his top perquisites, which required terminating his lucrative employment contract.

According to a filing with the Securities and Exchange Commission late Wednesday, the board of directors, which had set up Mulva’s contract in late 2001, agreed to throw out the CEO’s current contract effective Oct. 1, when he takes over as chairman.

Mulva, 58, now operates under a compensation package that pays him $6.88 million a year in salary and bonuses. He also exercised $1.37 million in stock options last year. His current contract provides a severance payment equal to three times his annual base salary, the average of the two highest bonuses paid over three years prior to any termination, a pro-rated bonus, stock options and several other things.

According to Conoco, Mulva’s future compensation would be covered by one of two new plans, which are scheduled to take effect Oct. 1. Either of the new plans would be less generous than the current benefits.

According to the new Executive Severance Plan, if Mulva were to be terminated without cause, he could receive a cash severance equal to up to two times his salary and bonus, as well as continuation of certain benefits. Under a new Change in Control plan, which would be in effect if the company changed hands or Mulva’s job was terminated without cause for good reason, he would receive a cash severance payment equal to two-three times his salary and bonus, as well as continuation of certain benefits.

The company was downplaying Mulva’s decision, but there were rumors that Mulva agreed to the changes to enhance Conoco’s shareholder value, and send a signal to other top managers that he wanted to improve the company’s value and reputation with shareholders. Archie W. Dunham, chairman of the board and a 40-year Conoco employee, will be retiring at the end of this month, and Mulva has been elected to succeed him.

©Copyright 2004 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.