BP to avoid repeat CEO pay policy row

Oil giant BP is courting new investors to avoid a repeat of the pay row for its chief executive.

In April, the board voted against a £14m pay package for its chief executive Bob Dudley and Sky News reported on 18 August the company had met with potential investors recently to discuss proposals for a new boardroom pay policy.

Sky News cited sources saying that remuneration committee chair Dame professor Ann Dowling wanted to avoid repeating the boardroom revolt and suggested there should be a new incentive scheme for American BP managers who had not seen any or very little return from previous pay schemes since the Gulf of Mexico oil spill in 2010.

The oil spill in the Gulf of Mexico resulted from an explosion in Transocean’s Deepwater Horizon drilling rig. It was the worst offshore oil and environmental disaster in US history as 11 people were killed and over 3m barrels of oil were spilled, affecting the shorelines of several states for about three months. BP’s final bill for the disaster came to $61.6bn.

At the annual shareholders meeting in April, about 60% of investors opposed Dudley’s pay package, in an advisory, nonbinding vote.

Dudley was paid $14m last year as about 5,000 jobs were cut and the company reported a £3.7bn ($5.2bn) annual loss, its biggest ever.

During the coalition government, former business secretary Sir Vince Cable introduced reforms that investors get a binding vote on forward look pay policy every three years. Prime Minister Theresa May has said that she wants to tackle executive pay.

Shares in BP were up 0.47% to 437.60p at 1005 BST.