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BP shareholders revolt against director bonuses

Daily Telegraph

BP shareholders registered a protest over bonus payments at the annual shareholders’ meeting yesterday, with almost 38pc of votes cast against the oil group’s remuneration package. However, the motion was still approved. 


BP shareholders registered their protest against a 15pc discretionary bonus awarded to directors Photo: PA

Peter Sutherland, chairman, was also criticised for his role as a non-executive director of Royal Bank of Scotland, but he was re-elected, with 95.9pc of votes in favour.

Shareholders registered their protest against a 15pc discretionary bonus awarded to BP directors, despite the company’s performance not meeting to requirements of its bonus plan. The awards were made for the company’s “excellent operational performance”.

Bonus payments to BP directors are usually based on total shareholder return (TSR) compared with a peer group of “supermajors”.

Tony Hayward, chief executive, received bonus shares worth £336,000 for 2008, despite the company being at the bottom of its peer group in terms of TSR.

At the annul general meeting in London, Mr Sutherland tried to reassure investors concerned about a future cut in the company’s dividend. He said the company will continue pay-outs and maintain investment to ensure future growth.

However, Mr Sutherland also said that, with oil prices below $60 a barrel, it didn’t generate enough cash to pay dividends and invest for growth. The company plans to freeze its dividend this year and borrow money to make the payment until market conditions improve.

Mr Sutherland said that the hunt for his successor was “well advanced” and a new chairman would be in place before next year’s AGM.

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