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June 12, 2008 | Vol. 58, No. 10

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In This Issue

Dear PEI Member:

The compensation policy and reward system of a company are viewed by the employees as indicators of management's attitude and concern for them. Implementing a compensation system that is competitive and attractive for the employee and at the same time, profitable for the company, is a formidable task. PEI has recently completed the most up-to-date study available in the industry, and has sent the results to all PEI distributor members that participated in the study. 

The 2008 Employee Compensation Report comes in two sections. The detailed PEI Employee Compensation Report (Volume I) contains information on the 99 PEI distributors taking part in the survey. This section provides information on both executive and employee compensation, including salaries, bonuses, commissions and perks. It also includes details on fringe packages, such as retirement programs, health insurance, vacations and the like.

The Cross-Industry Report (Volume II) includes data submitted from 1,704 different firms in other distribution-related industries. The report takes advantage of the large sample size to provide information at its most detailed level by geographic area (including over 100 specific cities) and by 20 different sales categories.

The reports contain thousands of pieces of useful information. When analyzed together, the PEI Report and the Cross-Industry Report allow the reader to compare statistics and compensation packages between PEI members and the other participants in the survey. Reports from previous years can be used for purposes of comparison. For example, the table below shows the average annual percent increase since 2003 in total compensation packages for both PEI members and distribution-related industries in general.                       

  Typical PEI
Typical U.S.
CEO/President +11% +7%
COO/VP/#2 Officer +5% +8%
Chief Marketing Officer +14% +6%
Chief Financial Officer +5% +6%
Branch Manager +5% +3%
Typical Outside Salesman +8% +6%
Purchasing Manager +2% +4%
Installation/Service Manager +6% N/A
Typical Inside Salesman +10% +6%

2008 PEI Distributor Compensation Study

Ethanol Additive Bill

Regulatory Briefs


In This Issue

PEI and Industry Events »


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All PEI distributors that participated in the survey should have recently received the reports. The 2008 Employee Compensation Report is available to nonparticipating PEI distributor members for $295. PEI provides the Cross-Industry report on CD, together with a printed copy of Volume I. Order online by clicking here.

"Controversy over biofuels
—including their role in food price spikes and their limited greenhouse gas reduction benefits—is blocking congressional efforts to create a new EPA program to develop additives for limiting ethanol's corrosive effects on underground storage tanks (UST) and other fuel infrastructure, which may increase fuel spills.

"House lawmakers last year approved H.R. 547 which authorizes EPA's Office of Research & Development, in consultation with the Department of Energy and the National Institute for Standards & Technology, to research and develop 'materials to be added to biofuels to make the biofuels more compatible with infrastructure used to store and deliver petroleum-based fuels.' Senate Republicans included identical legislative language in S.2958, a broad energy bill they introduced last month. S.2958 has yet to have a hearing before the Senate energy committee, while the Senate version of the stand-alone House bill is yet to be considered in the environment committee.

"The research authorized by the bill would help address widespread concerns that because ethanol and other biofuels are more corrosive than conventional gasoline their increased use could result in more fuel spills from USTs and pipelines. Insurance industry officials and gas station owners say they are concerned that growing efforts to use an 85-percent ethanol blend—known as E-85could result in increased spills from USTs."
— INSIDE EPA, June 6, 2008.

New Jersey. The state has proposed new rules for the Department of Environmental Protection's certification programs for individuals and businesses that work on regulated underground storage systems and unregulated heating oil tank systems. New rules are also proposed concerning professional business practices to be followed by these certified individuals and companies. Comments are due by July 7, 2008.
Oklahoma. Gasoline blended with at least one percent ethanol or methanol must have a label on the dispenser providing that information. Gasoline that contains at least 10 percent ethanol or 5 percent methanol must have a label on the dispenser indicating the percentage of ethanol or methanol in the fuel. The effective date is July 1, 2008.

If you are a PEI distributor member who is looking for tools to use in planning sales growth, you are encouraged to participate in the PEI Distributor Profitability Survey that is currently underway. Participants in the survey will receive a Profit Toolkit online that will assist you in your planning. This is available only to distributors who participate in the survey. Deadline for submission is June 30. The Distributor Profitability Report, provided free of charge to participating PEI members, is the best benchmarking source in our industry. If you want to know more about this program and its benefits to your firm, call PEI (918-494-9696) or the Profit Planning Group (303-444-6212). The survey form is available for download from our website.

Shields, Harper & Co., Inc.
, Oakland, California, has appointed J. D. "Dave" Sarginson president of the company, effective June 1. Sarginson has been with the company since 1978 and has held many positions during his continuous service including, most recently, executive vice president. He is the sixth president in the 91-year history of the company. The announcement was made by outgoing president Bart Scowley, who remains chairman and CEO.
PetroTechnik Inc., Cincinnati, Ohio, has made two recent appointments to represent its products in the central section of the United States. Windward Marketing Group was appointed as its representative in Illinois, Iowa, Kansas, Missouri and Nebraska. VSA Incorporated will represent PetroTechnik in Oklahoma, Arkansas, Mississippi, Louisiana, Texas and western Tennessee.
PumpTex Inc., Beaumont, Texas, has promoted Glenn Blanchard to branch operations manager at its facility in Austin, Texas. Blanchard has been with the company since 2002.

The American Petroleum Institute (API): Red Cavaney will retire from his post as president and chief executive officer of the API effective November 1. Jack Gerard, president of the American Chemistry Council, has been selected as Cavaney's successor.

, which trades under the name Caltex in Kenya, has its Kenyan and Ugandan operations for sale.
Texas Petroleum Group LLC (TPG) has signed a purchase and sale agreement for Motiva Enterprise LLC's interest in 162 Shell-branded retail gasoline stations in the Houston metropolitan area. TPG, a 50/50 joint venture between Landmark Industries Holdings Ltd. and Shell Oil Products US, will continue to sell Shell-branded gasoline.
ConocoPhillips, Houston, Texas, expects to sell its remaining 350 company-owned, company-operated convenience stores this summer.
Repsol YPF has sold its chain of 123 service stations in Ecuador to Primax for $47 million. The sale includes Repsol's lubricants and aviation fuel business in Ecuador and forms part of the sale of non-strategic assets set out in Repsol's 2008-12 strategic plan, the company said. Primax is owned by the Romero Group in Peru and Enap, the Chilean state oil company.

The Indianapolis branch of M&M Service/Mid Valley Supply will relocate June 16 to 2228 Yandes Street, Indianapolis, Indiana 46205. Telephone: (877) 381-7815 or (317) 347-8001. Fax: (317) 347-0363.


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Petroleum Equipment Institute
P. O. Box 2380
Tulsa, OK 74101-2380

The TulsaLetter (ISSN 0193-9467) is published two or three times each month by the Petroleum Equipment Institute. Robert N. Renkes, Executive Vice President, Editor. Opinions expressed are the opinions of the Editor. Basic circulation confined to PEI members.