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Standard Life calls on BP to shake up bonus code

Standard Life Investments, one of the City's most influential fund managers, has warned BP that it must shake up its remuneration code.

Guy Jubb, the head of governance and stewardship at the company, said that rules in place at the oil giant were too complicated and it needed a "simplified, cohesive" approach.

"We are concerned that the executives have the potential to receive significant rewards for achieving unchallenging performance targets, which, as a matter of principle, we oppose," he said at BP's annual meeting in London.

"We have voted against or abstained on remuneration-related resolutions at seven out of the last eight AGMs. We want to see the remuneration committee raise its game and make significant improvements to address our concerns."

Standard Life owns more than 1 per cent of BP's shares, making it a top 20 investor.

The warning came as BP weathered an expected storm at the AGM with investors representing just 5.88 per cent of shares voting against its 2012 remuneration report, almost half the 11.79 per cent that did so last year.

According to the company, 91 per cent of investors backed the re-election of the chairman, Carl-Henric Svanberg.

Pirc, the shareholder advisory body, had advised investors to vote against the BP chief executive Bob Dudley's pay, which included an annual bonus worth £2.6m in shares and cash, despite a slump in its profits.

Earlier at the AGM, Mr Dudley, who took over following the Gulf of Mexico oil spill in 2010, said: "After the accident, 2011 was a year of recovery and consolidation. We put in place structures and systems to further embed safety and operational reliability.

"The year 2012, as we promised, was a year full of milestones, as we set about delivering that programme of change and delivering on our 10 Point Plan.

"Looking forward, 2013 will be a year of execution as we continue to build financial momentum in the company," he added.

BP shares closed down 0.3p at 451.7p.