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£1.5m bonuses fuel BP investor revolt

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Lauren Mills, Daily Mail, 18 April 2008, 9:16am

More than a third of BP investors protested against £1.5m ‘retention’ bonuses in a rebellion over pay at the oil giant’s AGM.

Some 9% of shareholders who voted, cast their vote against directors’ remuneration packages and a further 27% registered their displeasure by withholding their votes.

The anger centred on two of the company’s top five executives – Iain Conn and Andy Inglis – who are each in line for a £1.5m ‘special retention award’ that will be paid in shares over the next three to five years.

The bonuses will be served up as compensation to the two men for missing the chance to get the top job.

Tony Hayward was anointed chief executive after Lord Browne of Madingley was forced to quit last year over a perjury scandal.

The Association of British Insurers alerted shareholders about the retention bonuses ahead of the meeting.

It fears BP’s move to offer such large compensation awards for merely missing a promotion will set a dangerous precedent.

Shareholders were concerned about general rises in directors’ pay. One private investor said at the annual meeting: ‘I am strongly opposed to the ramping up of senior executives’ remuneration which bears no relationship to increases in sales or dividend rises.’

DeAnne Julius, a non-executive director and chairman of the remuneration committee defended the increases.

She said: ‘The major increase in the bonus element was because the previous year’s bonus was cut in half because of the Texas City and Alaska issues.’

Chairman Sir Peter Sutherland moved to assure the 900 people attending at London’s Docklands that BP’s new management was improving the group’s safety record.

He said: ‘We have made good progress over the year in safety, but we must never be complacent.’

He said BP is hoping to provide a ‘range of assistance’ to Iraq’s oil industry. Activist groups are worried that western oil companies may ride roughshod over local operators.

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