IoD boss says vote is warning to others
Shareholders vote down BP boss Dudley’s £14m pay deal
More than 59% of voted against Mr Dudley’s proposed 20% pay increase which came after a year when the company plunged into a loss and laid off thousands of workers.
The Institute of Directors warned earlier this week that it risked sending “the wrong message to other companies”.
After today’s vote Simon Walker, Director General, said: “How the board of BP reacts to this rebellion will determine the future of corporate governance in the UK. The shareholders have spoken, and BP cannot shrug of this significant expression of disapproval with the CEO’s pay package.
“British boards are now in the last chance saloon, if the will of shareholders in cases like this is ignored, it will only be a matter of time before the Government introduces tougher regulations on executive pay.”
While non-binding, the vote prompted chairman Carl-Henric Svanberg to pledge a review of future remuneration terms.
In his address at the opening of the shareholders’ meeting Mr Svanberg acknowledged the strength of feeling, saying: “Let me be clear. We hear you.”
Aberdeen Asset Management and Royal London Asset Management were among the institutional shareholders who voiced criticism of Mr Dudley’s pay and bonus deal and several investor groups also branded it too much, particularly at a difficult time for the oil industry.
Legal & General Asset Management said it voted its 3% holding against the pay deal.
Executives were due to receive the maximum bonuses possible even though BP made a £3.6 billion loss last year and shed 5,000 jobs.
The package for Mr Dudley was thought to partly reflect his successful negotiation over the Gulf oil spill. He clinched a final settlement with US authorities which many investors said at the time removed uncertainty around the firm’s future.