Thursday 14 April 2016 2:11 pm

BP shareholders reject chief exec's £14m pay package

BP shareholders have voted to reject chief executive Bob Dudley's 20 per cent pay rise at its general meeting today.

Shareholder ire had been stoked because the proposed payout comes against a backdrop of shrinking profit margins and thousands of job cuts at the oil giant.

However, today's vote is "advisory", meaning even a vote against will not necessarily force the firm to change his £14m pay packet.

Speaking at the start of the AGM, the firm's chairman, Carl-Henric Svanberg, said executive pay is judged on factors that are clearly within the management's control.

"From that perspective, the board has concluded that it has been an outstanding year. The pay reflects this and it is consistent with our policy," he said.

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Svanberg added: "On remuneration, the shareholders’ reactions are very strong. They are seeking change in the way we should approach this in the future."

"We hear you. We will sit down with our largest shareholders to make sure we understand their concerns and return to seek your support for a renewed policy."

BP's renumeration policy is subject to a binding shareholder vote every three years, with the next vote expected in 2017.

Aberdeen Asset Management, Royal London Asset Management, Glass Lewis, ShareSoc, Pirc and ISS had all said they would vote against Dudley's payout.

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The Institute of Directors also warned endorsement would send "the wrong message" to other companies.

"Should the pay package be approved, it could send the wrong message to investors and other boards. We therefore urge all shareholders to scrutinise the pay deal of Mr Dudley very closely," Simon Walker, director general of the Institute of Directors, said.