BP is facing a revolt from its shareholders over the salary of its CEO Bob Dudley.
Dudley’s salary jumped 20 percent in 2015 to $19.6 million, the same year in which BP reported a record loss of $6.4 billion and laid off more than 5,000 workers. His rising salary has been met with opposition from shareholders because it is not only unseemly, but also because the raise is not connected to the company’s negative performance. "We consider the pay of the CEO to be simply too high, and particularly so in a year when the company suffered a record loss of $6.4 billion in 2015. Even so his pay went up by 20 percent," wrote shareholder advisory group ShareSoc, pressings its members to vote against the company’s proposed salaries. Related: How The Oil Crisis Has Impacted Military Spending
Last week, other shareholder groups voiced their opposition to Dudley’s salary. “This proposed increase is both unreasonable and insensitive. In a year in which BP has reported its worst ever annual loss, it has decided to sharply boost Mr Dudley’s remuneration,” Ashley Hamilton Claxton of Royal London Asset Management said. “We will be voting against this proposal. While we acknowledge BP has had to weather a turbulent period for oil markets, we strongly believe that executive remuneration should remain tied to performance.” Other groups, such as Institutional Shareholder Services and Glass Lewis, agree. Related: Crude Charging Higher Ahead Of Big Week
BP has a set of metrics that help inform its executive salaries, and the board says the pay is justified. "BP's performance surpassed the board's expectations on almost all of the measures that determine remuneration - and the outcome reflects this," a BP spokesman told Reuters last Friday.
In addition to the salary, BP and other top executives receive a pension, with the company paying around 35 percent of their salaries, another area of concern for shareholder groups.
BP has been hard hit by the downturn in oil prices and the costs stemming from the catastrophic oil spill in 2010 in the Gulf of Mexico.
By Charles Kennedy of Oilprice.com
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Oh, wait, Bob's his name.