© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
March 6, 2013 9:41 pm
Mr Dudley’s total remuneration stood at $2.67m, against $3.4m last year. The American earned a salary of $1.73m and a cash bonus of $837,000 – both slightly higher than in 2011 – but no performance shares, which are tied to BP’s long-term performance, were vested under the incentive plan.
The information was contained in BP’s annual report for 2012, which was released late on Wednesday.
BP said that shares to a value of 5.5 times salary for the group chief executive are normally awarded annually. But vesting of the shares after three years is “dependent on performance relative to measures reflecting the strategic priorities of the company”.
In a letter to shareholders, Antony Burgmans, chairman of BP’s remuneration committee, said performance measures for the share plan were related to total shareholder return, production, net income, and profitability in its refining and marketing division – all relative to other oil majors.
“As the starting point for these metrics was before the Deepwater Horizon accident, performance failed to meet the level required for vesting,” he said.
The pay decision shows the continuing effect of Deepwater Horizon on BP some three years after the well blowout in the Gulf of Mexico that killed 11 men and triggered the worst offshore oil spill in US history.
The details of Mr Dudley’s remuneration come just over a week after the start of a trial in New Orleans to determine liability for civil penalties and damages over the spill. BP is facing off against private sector plaintiffs, the US government, Gulf coast states and other companies involved in the well.
Mr Dudley’s performance bonus reflected his success in categories such as “rebuilding trust” and “safety and risk management”, with fewer safety incidents and spills.
However, success in “restoring value” was mixed. BP was on target in delivering upstream projects and had exceeded its goal for divestments. Operating cash flow, underlying profit and total cash costs “did not achieve plan targets”.
The weak result in total shareholder return reflected the fact that BP’s share price was about 30 per cent below the pre-spill level. BP said £100 invested in its shares in 2007 would now be worth £89.60, whereas a hypothetical £100 holding in the FTSE 100 index would be worth £111.79.
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in