Oil firm BP gave shareholders a taste of how committed the company is to keeping costs to a minimum in the face of falling oil prices at its annual general meeting, held yesterday in London, after it laid on a feast of sandwiches and crisps instead of the usual hot food.
When one shareholder asked why the choice had been made to change the menu, chairman Carl-Henric Svanberg said: “That’s austerity”.
Attendees at the meeting cannot have been too surprised at the cutbacks – once again, BP’s management said they were expecting the current low oil price environment to continue for the foreseeable future.
Echoing remarks he made at the time BP’s results for 2014 were published, chief executive Bob Dudley said he was still “not optimistic” that the oil price would improve in the near term.
According to Dudley, BP is planning for a “lower-for-longer world”.
“We have had to make some tough decisions ourselves in recent months about resetting BP for $50 oil,” he said.
Despite this focus on reshaping for tighter times, Dudley’s pay went up by 25 per cent to $12.74m (£8.53m) last year.
This hike in salary drew criticism from investors, and proxy advisory group Glass Lewis urged shareholders to vote against the proposed remuneration, citing the fact that BP has underperformed compared to competitors in 2014.
This advice appeared to have had little effect though, as yesterday just 11 per cent of shareholders voted against Dudley’s proposed pay packet.
Shareholder action groups were however celebrating a victory on pushing environmental issues further up the agenda at BP.
As green groups protested outside the ExCel centre, the venue for yesterday’s meeting, over 98 per cent of the company’s investors voting in favour of a resolution aimed at making the group more transparent on climate change.
Dudley said the group had a “very positive contribution” to make to the discussion around climate change and the need for fossil fuels.
Meanwhile, BP was forced to address speculation that it could be looking to follow rival Shell into the consolidation game.
A possible deal between BP and Exxon was just one of the combinations suggested in the flurry of predictions that came in the wake of Shell’s £47bn bid for BG Group.
However, Svanberg and Dudley both threw cold water on the idea of BP seeking out acquisition targets.
Dudley stated that the group is “happy” with its portfolio, while Svanberg remarked that some companies ran into difficulties as a result of being “too large”. He added: “This company doesn’t suffer from being small.”
Shares in BP fell by 0.49 per cent.