BP CEO gets $12.74 Million Pay Check

Bob Dudley

By MarEx 2015-04-02 20:00:17

BP Chief Executive Bob Dudley's total compensation rose by more than 20 percent to $12.74 million in 2014, when the company's profit fell due to lower oil prices and production.

Dudley's salary and annual bonus fell to $2.95 million from $4.21 million in 2013 but deferred bonuses and performance shares' awards rose to $9.79 million from $5.96 million a year earlier, according to a BP regulatory filing.

As a result, his total remuneration rose to $12.74 million in 2014 from $10.17 million in 2013.

Executive pay is regularly a thorny issue at BP's annual shareholding meetings.

Last year, some shareholders opposed approval of Dudley's 2013 pay, which tripled on 2012, citing outstanding legal suits in the United States over the Macondo oil spill in the Gulf of Mexico in 2010. The pay was approved by a majority of shareholders.

BP argues that it can retain top talent only by paying its executives competitive salaries, which are still far below those in the United States.

Rex Tillerson, the long-serving chief executive of Exxon Mobil, earned $40 million in 2012, falling to $28 million in 2013. Chevron's chief John Watson's compensation also fell to $24 million in 2013 from $32.2 million in 2012.

BP said its chief financial officer Brian Gilvary's total compensation rose to 3.07 million pounds ($4.72 million) from 2.17 million pounds while the long-serving head of downstream Iain Cohn, who left the company last year, received 5.81 million pounds, up from 3.71 million in 2013. 

Shareholder discontent

Two leading consultants had urged BP shareholders to vote against Dudley's $12.7 million 2014 pay, saying it was not in line with the energy major's poor performance.

Glass Lewis and Pensions & Investment Research Consultants (PIRC), which advise institutional shareholders and issue proxy vote recommendations, both said Dudley's remuneration exceeded that of its European peers.

Investors have become increasingly vocal over executive remuneration in recent years. Lawmakers have adopted new rules on pay transparency and given shareholders more power to block payouts.

"The changes in CEO pay over the last five years are not considered in line with the company's financial performance over the same period," PIRC said.

Glass Lewis said BP pays "more to its CEO than the median CEO remuneration for a group of European Energy companies. Overall, the company performed worse than the peers."

BP executives received bonus payouts of 73 percent of the company's maximum limit, despite below-target performance on several metrics, according to Glass Lewis.

In one instance, Glass Lewis "strongly" questioned BP's policy of granting bonuses of up to 150 percent of salary based on the absence of major safety and environmental incidents.

($1 = 0.6501 pounds)