BP to face rebellion on pay awards
Wednesday 13 April 2011
Oil giant BP is expected to face further shareholder ire at its annual general meeting over "wholly unacceptable" boardroom pay packets awarded in the wake of the Gulf of Mexico oil disaster.
Chief financial officer Byron Grote and chief executive of refining and marketing Iain Conn were awarded £380,000 and £310,000 respectively for hitting targets in their area of the business in 2010.
While Tony Hayward, who presided over the company at the height of the Deepwater Horizon crisis, has not received an annual bonus for 2010, he and former head of exploration Andy Inglis could potentially earn up to £8 million and £6 million from vested performance shares, which relate partly to the period in which the disaster occurred.
Chief executive Bob Dudley did not receive a bonus last year.
BP is still reeling from the Gulf of Mexico disaster last year which killed 11 workers and triggered the largest offshore oil spill in US history.
A raft of investors have come forward to announce their intention to vote against the remuneration report and annual report tomorrow.
The Association of British Insurers has given an "amber top" alert to the remuneration report while Christian groups including the UK's Church Investor Group are advising voting against the report.
PIRC, an adviser to institutional investors, said the pay package was "excessive" and the proposed payouts for Mr Hayward and Mr Inglis were "wholly unacceptable".
It was reported two major shareholders - Calpers, the biggest US public pension fund, and Florida State Board of Administration - both said they would oppose the annual report and vote against the re-election of Bill Castell, non-executive director and head of safety, ethics and environment assurance committee.
BP will not only face anger over executive pay as it is preparing for an acrimonious showdown with environmentalists, Gulf of Mexico residents and anger over its strategy in Russia.
The company's £10 billion share-swap deal with Russian government-owned Rosneft is on the verge of collapse as tomorrow's deadline to sign off the agreement has yet to be extended.
The deal, which would have also seen BP and Rosneft jointly explore the Russian Arctic, was put on hold after shareholders with its current Russian partner TNK-BP raised concerns.
The group of Russian oligarchs, known as Alfa-Access-Renova (AAR), accused BP of breaking an agreement which obliges both parties to pursue new projects in Russia through the 50-50 venture with TNK-BP.
BP was given permission to discuss extending the April 14 deadline with Rosneft but it is understood this has yet to happen.
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