Shareholder backlash drags BP chief’s pay down 40%

BP Chief Executive Bob Dudley's total pay package for 2016 was slashed by 40 percent to $11.6 million, according to the company’s annual report, published on Thursday.

The cut of nearly $8 million dollars follows changes to the oil company's pay policy, including a 25 percent reduction in bonuses for reaching targets.

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The cuts were also prompted by a shareholder revolt last year when nearly 60 percent opposed Dudley's 2015 pay and benefits package worth $19.4 million that was up 20 percent despite a weaker performance by BP.

The oil giant also cut Chief Financial Officer Brian Gilvary's overall pay package by 18 percent to $5.2 million.

“It is clear, that shareholders and other stakeholders would like our remuneration policy to be simpler, more transparent, and to lead to reduced levels of reward. As a result - in a year of good performance and progress - Bob Dudley's total single figure for 2016 has been reduced by some 40 percent compared to last year,” said the head of BP's remuneration committee, Ann Dowling in a letter to investors.

The company’s shareholders will get the right to decide whether to accept the new remuneration policy in a vote at this year's annual meeting scheduled for May 17 in London. If approved, the pay policy changes will apply for the coming three years.

“I have consulted widely with shareholders and listened to and sought to act on their concerns, and have been sensitive to developments in the society in which we work,” Dowling said in the company's annual report.

Even after a significant cut, Dudley's pay remains well above that of the company’s European peers.

Ben van Beurden, the head of Royal Dutch Shell, was awarded an $8.8 million pay package for last year, while Patrick Pouyanne, Total's chairman received about $4 million for 2016.

According to BP's annual report, the company cut 5,300 jobs last year as part of plans to rein in spending due to lower crude prices.