BP shareholders overwhelmingly voted against chief executive Bob Dudley bloated executive pay package of £14m at its AGM yesterday
Some 59% of shareholders rejected the deal of the FTSE 100 company. The vote, while not binding, is one of the biggest ever investor pay rebellions since 2012’s ‘shareholder spring’ when investors staged a series of pay revolts in the AGM season.
Dudley, the 60-year-old American, who slashed over 5,000 jobs in the last 12 months alone, will still receive the enormous payout despite the oil giant amassing it worst ever losses of £4.58bn in the last year.
Simon Walker, director general of the Institute of Directors, 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.”
At the start of the meeting, and before the vote had been determined, BP chairman Carl-Henric Svanberg told the audience that “we hear you.”
He said he would will sit down “with our largest shareholders to make sure we understand their concerns and return to seek your support for a renewed policy.”
“We know already from the proxies received and conversations with our institutional investors that there is real concern over the directors’ pay in this challenging year for our shareholders.
“On remuneration, the shareholders’ reactions are very strong. They are seeking change in the way we should approach this in the future,” he said.
A number of big institutional investors such as Pirc, shareholder group Sharesoc, the Institutional Shareholder Services, Aberdeen Asset Management and Royal London Asset Management have all expressed their opposition to the pay hike and the wider wave of resentment building again of bloated boardroom pay.
Before yesterday’s vote, a BP spokesman told the BBC that shareholders themselves had backed the pay formula at the 2014 AGM with over 96% of the vote.