BP shareholder revolt over top pay

A LARGE minority of BP shareholders voted against the firm’s 2008 pay packages for directors at its annual meeting yesterday.

Anger about Sir Tom McKillop, a former BP director and ex-chairman of RBS, was the most emotive investor concern.

According to early polls projected at BP’s annual meeting, only 62 per cent of BP shareholders approved last year’s remuneration package.

That package included a 16 per cent rise in basic salary plus bonus for BP chief executive Tony Hayward to £2.5 million (€2.83 million), and a 13 per cent rise in the package for finance director Byron Grote to $3.1 million (€2.35 million). All non-executive directors received a raise, including Sir Tom, who will receive £95,000.

Sir Tom, who as former chairman of RBS has become synonymous with the financial crisis in the UK, quit the BP board two weeks ago.

At annual meetings a 60 per cent approval rate for any resolution is considered a protest vote, as many resolutions pass with 99 per cent shareholder approval.

“If you mention executive pay, people just say ‘no’ at the moment,” said Jonathan Rigby, energy analyst at UBS. “I don’t think the executives have done very much wrong . . . unless there’s some intricate sense of dissatisfaction around corporate governance.”

Salaries for BP directors are frozen this year, the group emphasised, at the request of the chairman and chief executive.

Pay last year, it said, was based on last year’s performance, when BP posted profits of $25.6 billion for 2008 despite a fourth-quarter loss of $3.9 billion.

Emotions involving executive pay ran high as several shareholders took the microphone to voice their opposition to Sir Tom. – (Copyright the Financial Times Limited 2009)