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The Times Online: BP chiefs share £10m despite profits plunge

March 4, 2008
Dearbail Jordan

BP’s executive directors last year took home nearly £10 million in pay and bonuses after reporting a 22 per cent profit fall despite record oil prices

Lord Browne of Madingley, who resigned as BP’s chief executive at the beginning of May after lying in court, received a total £2.7 million last year. This included a £1.5 million lump sum, equal to one year’s salary, as well as £1.2 million for four months work.

The oil group’s annual report and accounts reveal that Lord Browne was awarded a package that included £531,000 in salary, a £621,000 bonus and £85,000 for a car, a driver and office administration costs.

In total past and present executive directors at BP earned £9.2 million for one of the worst years in the oil company’s history that will result in 5,000 of staff losing their jobs in an effort to cut $1.5 billion in costs.

Tony Hayward, who took over from Lord Browne last year, earned a total £2.1 million, including a bonus equal to nearly 150 per cent of his £877,000 salary for 2007.

BP’s annual report also shows it has agreed a “special retention reward” of £1.5 million each in shares to Andy Inglis and Iain Conn that will be paid out between a three and five year period.

Mr Inglis took over from Mr Hayward as head of exploration and production while Mr Conn was appointed as chief of refining and marketing, after John Manzoni stepped down last year following the fatal Texas City refinery blast which claimed 15 lives. Mr Manzoni earned a total £1.1 million, including £677,000 in salary and bonuses with the rest made up of a lump sumn payment.

BP said the rewards “recognize the importance of these individuals’ leadership in re-establishing the company’s competitive performance as well as their personal attractiveness for top jobs externally.”

However, in recognition of BP’s poor performance compared to its peers, Mr Hayward missed out on a £4.8 million bonus that would have been paid out in shares.

In a measure of total shareholder return generated by the world’s leading oil companies, BP was last behind ExxonMobil, Shell, Total and Chevron. Last month, Dr Hayward attempted to win shareholders round when he increased the dividend by 31 per cent, as he attempted to draw a line under 2007.

BP disclosed today that it will increase the compensation set aside for victims of the explosion, which also injured 160 workers, from $1.6 billion to $2.1 billion. So far, the company has settled 2,000 claims.

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article3482681.ece

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