BP fights off attack as pay policy passed

ONE of BP’s biggest shareholders yesterday launched a blistering attack on the oil giant’s pay policy accusing it of having the potential to reward bosses for meeting unchallenging targets.

Standard Life Investments, which holds 1.3 per cent of BP, also said its remuneration policy – which contains 15 different performance metrics – should be simplified.

“We want to see the remuneration committee raise its game and make significant improvements to address our concerns,” Standard Life Investment’s global head of governance and stewardship Guy Jubb said at yesterday’s annual general meeting.

Standard Life has voted against BP’s executive pay in seven of the last eight years.

Despite Standard Life’s stance just 5.88 per cent of BP’s investors voted against its 2012 remuneration report yesterday – almost half the 11.79 per cent that rejected the report the previous year.

A similar level of dissent was recorded against the re-election of the BP chairman, Carl-Henric Svanberg. He has been at the centre of criticism of BP executives since the Macondo explosion three years ago.

Chief executive Bob Dudley’s pay fell by a fifth last year because of performance measures set over a three-year period that began in 2010, the year of its disastrous Gulf of Mexico oil spill.

BP said the number of shareholders voting in favour of its remuneration report was the highest number for seven years and compared well with many other companies in previous years.

While BP remains in court in the United States over the spill, it has already made some partial settlements. Investors, buoyed by the recent sale of its stake in its Russian venture TNK-BP, have started to price in an end to the spill saga.