Two leading consultants have urged BP shareholders to vote against chief executive Bob 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 Mr 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.
Mr Dudley's 2014 remuneration, which rose by more than 20 per cent from 2013, despite a slide in BP's profits due to falling oil prices, will be put to vote at its annual general meeting on April 16.
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 per cent 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 per cent of salary based on the absence of major safety and environmental incidents.
Mr Dudley's 2014 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.
BP rejected the claims.
"Executive pay is closely linked to BP's performance and is defined by the remuneration policy which was overwhelmingly approved by our shareholders at last year's AGM," a spokesman said.
"Remuneration for 2014 was entirely in line with this policy and reflected the delivery of BP's strategic targets over the past three years."
Glass Lewis also recommended voting against Dudley's 2013 remuneration last year, but the vote won by more than two thirds of shareholder support.
Another proxy advisor, Institutional Shareholder Services, recommended a vote in favour of the 2014 remuneration, saying BP had addressed disclosure issues.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article