The chief executive of BP was paid more than $19 million last year and received a maximum bonus payout for the first time after hitting a string of safety and financial performance targets, according to the company’s annual report.
Bob Dudley, who was appointed six years ago in the aftermath of the Deepwater Horizon oil disaster, was paid a total of $19.6 million last year, an increase of more than 19 per cent on the $16.3 million he received in 2014.
The pay rise, which included more than $7 million in shares and a $6.5 million boost to his pension pot, came as BP slumped to a $5.2 billion full-year loss. The oil producer was buffeted by the sliding price of crude oil and huge legal bills linked to the disaster, in which 11 people died. BP cut thousands of jobs last year as it struggled to remain profitable in the face of the sharpest industry downturn for a generation.
For the first time since his appointment, Mr Dudley was awarded the maximum annual cash bonus available under the terms of his contract on top of his $1.8 million basic salary. This was $1.39 million, compared with just over $1 million the previous year.
Dame Ann Dowling, the chairwoman of BP’s remuneration committee, said that this was because BP had hit a series of safety and performance measures, including the avoidance of a set number of oil spills, workplace injuries and other safety incidents.
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She said that the payouts reflected the directors’ “performance in managing factors they can control and for which they are accountable”, which excludes the declining oil price or legal costs linked to a disaster that preceded Mr Dudley’s appointment as chief executive.
“BP had an excellent year for safety and operational performance in a difficult environment,” according to the annual report. “Safety performance was again very encouraging, resulting in maximum scores for all three measures — tier one process safety events, loss of primary containment and recordable injury frequency.”
Under the terms of the group’s bonus plan, BP had to record fewer than 253 “losses of primary containment”, or oil spills. In the event, the oil company recorded only 208. Of a maximum 29 permitted “process safety tier one events”, a measure that can include injuries to staff or serious damage to equipment, BP recorded 20.
BP’s top management also met financial targets on cashflow, investment levels and costs, which allowed Mr Dudley to qualify for his maximum bonus payout.
Brian Gilvary, BP’s chief financial officer, was paid a total of just over £5 million last year, up from £3.6 million in 2014.
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Like all oil producers, BP has been hit hard by the falling price of crude oil, which, according to the Brent benchmark, dipped from more than $114 per barrel in June 2014 to lows of about $27 in January.