LONDON (Reuters) - Investors’ advisory firm PIRC is urging BP’s (BP.L) shareholders to vote against Chief Executive Bob Dudley’s new pay package, calling it “excessive” even after the changes which have been made following a shareholder revolt last year.
Pensions & Investment Research Consultants (PIRC) also advised shareholder clients in a note to abstain in a non-binding vote at BP’s annual general meeting in London on May 17 on Dudley’s 40 percent cut in pay to $11.6 million (£9 million) last year.
Last month BP reported the cut in Dudley’s pay package for last year, and introduced changes from this year that will lower its top executives’ performance incentives, after around 60 percent of shareholders opposed its previous pay policy at last year’s annual general meeting.
“Overall, the proposed changes... are considered positive,” PIRC said.
“However, these (changes) are considered insufficient to support the remuneration policy. The CEO’s maximum potential awards under all incentive schemes are considered excessive at 725 percent of salary.”
In contrast Glass Lewis, another shareholder advisory firm, has recommended a vote in favour of the changes.
“Given the committee’s strong response to shareholder dissent at last year’s AGM, we believe shareholders can reasonably support this proposal,” Glass Lewis said in a note.
“In particular, we view the discontinuation of share- matching awards and the broader simplification of incentive structures to be wholly positive.”
A BP spokesman declined to comment.
The changes, which will apply for the coming three years if approved by shareholders on May 17, include lowering Dudley’s maximum long-term payout to five times salary from seven times and cutting bonus payments by a quarter.
Dudley’s pay cut last year was a result of “downward discretion” to the four components of his total pay, the company said.
Even after a cut of nearly $8 million, Dudley’s pay remains above that of his peers at rival European oil companies, including Royal Dutch Shell (RDSa.L) where Chief Executive Ben van Beurden received 8.263 million euros (£7 million) in 2016 and Total (TOTF.PA) where Patrick Pouyanne was paid 3.8 million euros.
Editing by Jane Merriman, Greg Mahlich