The 20% year-on-year rise in Dudley’s pay was announced last month after the oil company had reported a record loss of $6.5bn and thousands of job cuts. The prospect of a revolt over pay has been brewing since the figure was announced and shareholder advisory bodies have also warned about the package, which included an extra $3.5m for Dudley’s pension.
Ashley Hamilton Claxton, corporate governance manager at Royal London Asset Management, said she would vote against the remuneration report. RLAM owns a 0.7% stake in BP. “This proposed increase is both unreasonable and insensitive. In a year in which BP has reported its worst ever annual loss, it has decided to sharply boost Mr Dudley’s remuneration,” she said. “We will be voting against this proposal. While we acknowledge BP has had to weather a turbulent period for oil markets, we strongly believe that executive remuneration should remain tied to performance,” she said.
The pension for Dudley and other executive directors – who receive contributions of around 35% of the salaries – is thought to be among the areas of concern.
Influential shareholder advisory body ISS has advised voting against the remuneration report, highlighting among other things that maximum bonuses are being paid to directors despite BP reporting a loss for 2015. Glass Lewis, another shareholder advisory body, has reportedly also recommended a vote against.
A spokesperson for BP said the pay deals were based on the pay policy which shareholders had approved in 2014. “Despite the very challenging environment, BP’s safety and operating performance was excellent throughout 2015 and management also responded early and decisively to the steep fall in the oil price. BP’s performance surpassed the board’s expectations on almost all of the measures that determine remuneration – and the outcome reflects this. And these clear measures derive directly from BP’s remuneration policy which was approved by shareholders at the 2014 AGM with over 96% of the vote,” the BP spokesperson said.
The company holds its annual meeting next Thursday, one of the first high-profile companies in the FTSE 100 to hold their AGMs for this financial year. On the same day, housebuilder Persimmon and mining company Rio Tinto will also meet their investors. In the coming weeks, companies such as Centrica, HSBC and Barclays are also holding annual meetings.
This article was written by Jill Treanor, for theguardian.com on Friday 8th April 2016 17.53 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010