BP to cut CEO’s annual pay by about 5 million pounds: report

BP Plc has agreed to cut the maximum pay package of its chief executive Bob Dudley for the next three years by about 30 per cen5t to avert a fresh shareholder revolt, reports said citing BP sources.

A Sky News report said Dudley's maximum annual pay over the next three years will be around £12.2m ($15.2m), including his salary, an annual bonus of £3.3m, and a long-term share incentive plan award of £7.4m.

However, he will only receive half his maximum bonus entitlement if the company meets performance targets – as opposed to receiving 150 per cent of his salary previously.

The previous pay package was worth up to 17.4 million pounds, including the matching share awards.

The report said the company had decided to reduce Dudley's maximum long-term incentive plan award from seven times his 1.48 million pounds basic salary to five times.

According to the report, Dudley's annual bonus will remain constant at a maximum of 225 per cent of his salary. The framework will also apply to other top BP directors between 2017 and 2019.

BP Plc has agreed to cut about 5 million pounds ($6.24 million) from Chief Executive Bob Dudley's maximum pay for the next three years in a bid to avoid a shareholder revolt, Sky News said on Monday, citing people briefed on the matter.

Shareholder have been opposing high executive pay since last April, when a majority of investors in BP voted down the oil company's plan to pay Dudley a £15.74 million ($19.6 million) remuneration package, reflecting outrage over the proposed remuneration after the oil company posted losses.

Nearly 60 per cent of BP shareholders voted against Dudley's yearly pay package at the company's annual general meeting in April last year.

Dudley ultimately received the £14m amount in full as the investor vote was non-binding, but BP chairman Carl-Henric Svanberg promised to review the company's executive pay policies.

The company has returned to firmer footing after the Gulf of Mexico oil disaster wiped out its market value and forced it to sell off billions of dollars worth of assets so it could pay fines and compensation.

BP's profits doubled in the final three months of 2016, helped by cost cuts and an increase in oil prices.

The change is expected to be outlined in BP's annual report due to be released later this week.