Good Year for BP, Pay Cut for CEO
BP has published its Annual Report and Accounts for 2017, highlighting that group Chief Executive Bob Dudley accepted a pay cut.
Dudley's pay was cut by 24 percent to $13.4 million despite 2017 being one of the best years in BP’s recent history. For the three-year period to 2017, BP achieved the best total shareholder return of its super major peer group and delivered 44 percent returns on U.K. shares.
The company introduced a new, “more demanding” remuneration policy, approved overwhelmingly by shareholders last year. Without it, Dudley would have earned $17.6 million. Some of Dudley’s 2017 payout arose from long-term performance shares awarded three years ago under the old policy, but the remuneration committee used its discretion and effectively applied the more demanding new policy to those shares as well. In 2015, Dudley received a maximum performance award of 550 percent of salary for the period 2015-17. In the spirit of applying the new policy early, he requested a reduction in his maximum award to 500 percent.
Dudley's $13.4 million was 13 percent higher than his pay for 2016 ($11.9 million) and 31 percent lower than his pay for 2015 ($19.4 million).
Carl-Henric Svanberg, BP Chairman, said: “2017 was a year which saw delivery and growth across all our businesses. This was an impressive performance from Bob Dudley and his great team, now fully into their stride. The company is in a great position to grow and has a clear strategy for the energy transition.”
BP made an underlying profit of $6.2 billion in 2017. “We said that 2017 would be a very important year for BP,” said Dudley. “We set out ambitious plans for the year, and we delivered on them. We promised to start up seven major projects in the Upstream. We brought these online and under budget for the portfolio as a whole. These projects, along with the six we brought online in 2016, have contributed to a 12 percent increase in our production. That helps to put us on track to deliver 900,000 barrels of new production per day by 2021.
“We also strengthened our portfolio with our most successful year of exploration since 2004, sanctioned three exciting new projects in Trinidad, India and the Gulf of Mexico and added 143 percent reserves replacement for the group.”