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Reuters: BP’s ‘dreadful’ performance weighs on CEO’s pay

Tue Mar 4, 2008 11:21am GMTBy Tom Bergin

LONDON (Reuters) – BP’s chief executive missed out on a possible 2.5 million pound bonus last year, as part of a long-term incentive scheme paid in shares, because of the oil major’s industry-lagging performance.

A BP spokesman said that under the scheme, Tony Hayward, who was appointed CEO last May, could have been awarded up to 436,636 shares but that as BP came last in a variety of measures against its main competitors, including Royal Dutch Shell and Exxon Mobil, Hayward received none.

In the previous two years, also difficult ones for the company, the scheme had paid out 30-40 percent of the maximum total.

However, Hayward still received a salary of 877,000 pounds and a cash bonus of 1.26 million pounds. In 2006, as head of BP’s core Exploration and Production unit, he was paid 1.34 million pounds in total.

Hayward is trying to turn around BP after three difficult years when major projects were delayed, pipelines ruptured and refinery accidents blamed on cost-cutting cost workers’ lives.

In September, Hayward told staff that performance at the world’s third-largest fully publicly quoted oil company by market value was “dreadful” and launched a restructuring to reduce complexity and cuts costs and jobs.

(Reporting by Tom Bergin; Editing by Erica Billingham)

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