BP bonuses for two directors despite US oil disaster
Friday 04 March 2011
Two senior directors at BP will still be paid bonuses for 2010, despite the Deepwater Horizon explosion in April which killed 11 people and resulted in the worst oil spill in US history.
Although the chastened oil major's remuneration committee ruled out any bonuses based on group-level results because of the Gulf of Mexico tragedy, Byron Grote, the chief financial officer, and Iain Conn, the head of refining and marketing, were judged to have exceeded their "specific segment targets" for the year. Dr Grote will be paid an extra $621,000 (£381,000), and Mr Conn an extra £310,500, taking their total pay packages to $1.6m and £828m respectively, both some way from their 2009 totals.
No other BP executive will be paid a bonus, and there is no vesting of the 2008-10 share element for any director, according to the annual report published yesterday.
"Remuneration decisions for 2010 were dominated by the scale and impact of the accident in the Gulf of Mexico," DeAnne Julius, the chairman of BP's remuneration committee , said. "In the judgement of the committee and the CEO this overrode the normal metrics for bonus outcomes."
Robert Dudley – who took over as chief executive from his gaffe-prone predecessor, Tony Hayward, at the start of October – saw his basic pay rise from $750,000 to $1.2m, in recognition of his promotion to the top job. But the total package of $1.7m will be less than last year, with the 2009 bonuses included.
Mr Hayward and Andy Inglis, the former head of exploration and production who also stepped down after the disaster, were paid contractual entitlements of a year's salary but neither was awarded any bonus for the year.
Even for Mr Conn and Dr Grote, a third of the bonus is deferred into share that will vest in three years' time, subject to meeting safety and environmental hurdles in the meantime.
Mr Dudley will not receive a pay rise this year. But Mr Conn and Dr Grote will see an increase – of £40,000 and $62,000 respectively – because they have had no raise since July 2008.
BP saw its first annual losses in nearly 20 years in 2010, dropping £3bn into the red, compared £9bn profits the previous year.
In the aftermath of Deepwater Horizon, Mr Dudley is working hard to drag BP back to business as usual. The company signed a $7.2bn deal with India's Reliance Industries last month and is also pursuing a $10bn tie-up with Russia's Rosneft, although the Russian plan is being contested by BP's existing joint venture in the country, TNK-BP.
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