BP chief weathers shareholder discontent over $20M pay pack

Danica Kirka, Associated Press

 

British energy producer BP has suffered a revolt by shareholders who objected Thursday to increasing Chief Executive Bob Dudley's pay package by 20 percent after profit plunged last year.

In this March 6, 2013 file photo, BP Group Chief Executive Bob Dudley gestures as he speaks at the IHS CERAWEEK energy conference in Houston. BP said Thursday, April 14, 2016, it's ready to listen to shareholder concerns about its executive compensation policy after some of the company's largest shareholders opposed plans to boost CEO Bob Dudley's pay package by 20 percent to $19.6 million even after earnings plunged. (AP Photo/Pat Sullivan, File)

LONDON (AP) — British energy producer BP has suffered a revolt by shareholders who objected Thursday to increasing Chief Executive Bob Dudley's pay package by 20 percent after profit plunged last year.

Almost 60 percent of shareholders rejected the remuneration report, which awarded Dudley a $19.6 million pay package, despite a drop in profit and thousands of job cuts worldwide. But the vote was only advisory, and merely registered displeasure.

The company got the message — and promised to review its remuneration policy ahead of next year's meeting. New proposals are expected to be put forward for shareholder approval in 2017.

"We hear you," Chairman Carl-Henric Svanberg said in excerpts released Thursday. "We will sit down with our largest shareholders to make sure we understand their concerns and return to seek your support for a renewed policy."

Aberdeen Asset Management, which manages more than 290 billion pounds ($411 billion), was among those complaining BP's award system was too complex. A representative from the Church of England also questioned the morality of such a rise, given that Britain is undergoing a time of fiscal austerity.

BP's earnings plunged 91 percent in the fourth quarter as the company was hit by low oil prices and continued to set aside money to cover costs related to the Deepwater Horizon disaster in the Gulf of Mexico.

Underlying replacement cost profit fell to $196 million from $2.2 billion in the same quarter a year earlier.

Ann Dowling, a non-executive director of BP, said she would talk to major shareholders as part of a review.

"We will certainly review the measures and criteria that we use to judge performance, including how in the future we deal with changes in oil price and also the link to shareholder value," she said.

 

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