Investors urged to reject pay deal

Monday 20 April 2015

BP shareholders have been urged to reject chief executive Bob Dudley's US$15.3 million (£10.4 million) pay package when they gather for the oil giant's annual general meeting today.

Mr Dudley's remuneration was 5% up on the previous year while the group's annual replacement cost profit slumped by 66%.

Shareholder advisory group PIRC described the package as "excessive" and advised investors attending the meeting in east London to vote against it.

Mr Dudley's basic salary rose 3% to US$1.8 million (£1.2 million) but his annual cash bonus was 57% lower at one million US dollars (£680,000).

However, deferred bonus and other share awards totalled 9.8 million US dollars (£6.6 million), up 64% on the year before. The total sum also included a pension contribution of 2.6 million US dollars (£1.8 million), plus other benefits.

Last year, 16% of shareholders voted against BP's remuneration report at the AGM.

PIRC said: "The changes in CEO pay over the last five years are not considered in line with the company's financial performance over the same period. Total CEO rewards are equivalent to over 800% of salary which is considered excessive."

BP has been adjusting to what Mr Dudley called the "new reality" of lower oil prices - which have slumped by half since last summer.

Announcing annual results in February, the group, which is a mainstay of UK pension funds, said it would cut investment for 2015 by a fifth or as much as six billion US dollars (£4 billion).

The company is also continuing to cut the cost of the blow-out of the Deepwater Horizon rig in 2010 which killed 11 workers and spilled millions of barrels of oil into the Gulf of Mexico. Its total charge so far is US$43.5 billion (£29 billion).

More recently, Royal Dutch Shell's £47 billion takeover of exploration firm BG has prompted speculation that BP could become the target of a bid from a rival.