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The Guardian: BP's Browne outperforms Shell boss with pounds 19m pay deal

Mar 15, 2006
Lord Browne, BP's chief executive, was given pay and shares last year and early this year that could be worth more than pounds 19m, it was revealed yesterday.
His basic remuneration rose slightly last year to pounds 1.4m and his income was lifted to pounds 3.3m with his performance bonus. But long-term and share-based payments sent his potential payouts soaring, in particular an award of 2m shares in April 2005 – only now disclosed – worth pounds 10.7m.
The payments have been made during a period of record profits on the back of strong oil prices but BP has had setbacks – not least a fire at its Texas City refinery. A BP spokesman defended the package, saying most of it was tied to the strong financial performance of the group, which had seen a 25% rise in its share price over the past year.
The pounds 10.7m award in shares was a maximum payout that would only be paid to Lord Browne if BP “continued to perform strongly against a large number of criteria”, the spokesman said.
The oil boss has benefited from 356,667 shares vested in February 2005 worth pounds 1.9m, dating back to a 2002-04 remuneration plan. Lord Browne took a further pounds 3.2m worth of shares last month under a scheme that ran from 2003 to 2005. But he has presided over a period when replacement-cost profits rose to a record $19.3bn (pounds 11bn) from $15.4bn in 2004. The company has also made big dividend payouts to investors and returned billions of dollars to shareholders in share buybacks.
Lord Browne's remuneration package puts him ahead of his European rival at Shell, Jeroen van der Veer. The annual report from the Anglo-Dutch group revealed that the Dutchman's total package for last year – including pension, bonus and deferred bonuses – totalled pounds 3.9m.
The previous year Mr Van der Veer earned pounds 2m, but this was a figure that did not include his bonus nor his pension, which was then calculated under a different Dutch reporting regime. The company said the only way to compare the two years for the chief executive was to look at his basic salary, fees and cash benefits, which rose from pounds 1.8m in 2004 to pounds 2.4m last year.
Shell has reported strong profits but has also had its weak points. The group replaced only 67% of its reserves last year. It previously said the figure was between 60% and 70%.
Meanwhile, Centrica, the owner of British Gas, announced that it had hired Sam Laidlaw to replace Sir Roy Gardner as executive director and chief executive.
Mr Laidlaw is executive vice-president of the US oil group Chevron, and was a chief executive of the former British exploration and production company Enterprise Oil. His basic salary will be pounds 850,000 and he will come in at a time of speculation that Centrica will become a target for takeover by Gazprom.

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