BP cuts CEO pay by $8 million after shareholder revolt

Posted at 10:35 AM, Apr 07, 2017
and last updated 2017-04-07 10:35:28-04

The boss of oil firm BP just took a huge pay cut.

CEO Bob Dudley’s total pay package for 2016 was cut by 40% to $11.6 million, BP said in its annual report.

LONDON, ENGLAND Group Chief Executive of BP, Bob Dudley addresses Confederation of British Industry, (CBI), members at the annual CBI conference at the Grosvenor Hotel on October 25, 2010 in London, England. (Photo by Dan Kitwood/Getty Images)

The reduction follows a rare shareholder revolt last year when 59% voted against Dudley’s 2015 pay and benefits package worth $19.6 million.

Shareholders protested his pay getting bumped up 20% despite a weaker performance by BP in 2015, when it reported an annual loss of $5.2 billion and its share price slumped. Dudley still got his money since the vote wasn’t binding.

The company said it has overhauled its executive pay policies since then, and the changes will be put to a binding vote of shareholders.

“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,” the head of BP’s remuneration committee, Ann Dowling, said in a letter to investors.

“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% compared to last year,” she said.

The company’s loss narrowed to about $1 billion last year. Like its peers, BP struggled in 2016 as oil prices fell as low as $26 per barrel. They’ve recovered since to around $50 per barrel but are still a far cry from the $100-plus level seen in previous years.

Despite the pay cut, the millions going to Dudley stand in stark contrast to the average salary of workers in the U.K., where BP is headquartered.

The average annual salary for full-time British workers stands at just over £28,200 ($35,200).

Dudley can make that amount of money in just nine hours on the job, based on his new compensation levels.

BP says Dudley’s total pay is 71 times the average paid to its managers in Britain and the U.S.