- Daily Zen
Shareholders of BP PLC had a message from their advisory body Pirac to vote against the compensation sought by the chief executive officer of BP PLC, Bob Dudley, as he demanded a BONUS of £2.6 million in shares and cash for standard performance of the company and poor profit margins.
However, the most powerful punch came from a shareholder – Standard Life Investments (SLI) which owns nearly 1 percent of BP shares and is one of the Top 20 investors in BP PLC. SLI itself is one of the leading fund manager in the region, and has already voted against the inflated bonus compensation package BP executives claim, seven times out of eight AGMs.
According to Guy Jubb, who heads the Governance and Stewardship of SLI, the rules that BP PLC adopted are complicated and are not ‘simplified, cohesive’ in their approach. “We are concerned that the executives have the potential to receive significant rewards for achieving unchallenging performance targets, which, as a matter of principle, we oppose it,“ he underlined at the annual BP meeting held in London.
SLI says that they have repeatedly opposed all attempts by BP executives by voting against or abstaining in the vote on payout to executive resolutions in previous AGMs. This opposition comes from both large and small investors because of dismal performance by BP PLC in the last few quarters.
BP had a taste of the things to come as investors owning just 5.88 percent of shares also negated it’s 2012 payout-package. This was half of the percentage of investors (almost 11.8 percent) who also voted against higher payouts the previous year. However, Carl-Henric Svanberg was elected with 91 percent backing him as the next Chairman of BP PLC.
Small investors underline that BP PLC has not shown any remarkable or ‘particular talent’ and are disappointed that the executive continues to seek higher payouts as Bonuses despite poor performance.
Another matter of confrontation was that targets that were set for bonuses were unchallenging and performance of BP PLC was slow, therefore executives seeking bonuses were disappointing.
The maximum bonus pay-out has not occurred in over 10 years as it is underlined by some of the executive board members of BP PLC. Additionally, BP’s green – track record is poor and its AGMs are often scenes of continued protests from environmentalists opposing the exploitative practices of the company, especially in Canada.
Post the 2011 Gulf of Mexico spills, BP PLC has come a long way. In the words of Mr.Dudley, BP has already seen fundamental changes in how it operates.
Interestingly, at previous voting sessions, more than 6 percent of shareholders voted against BP remuneration. The company strongly believes that the reorganization that has been taking place over the past few quarters has had a positive effect on the company’s bottom-lines. However, litigations and continued civil actions against the company in US courts, especially with respect to their Deepwater Horizon project, have been tough for BP PLC. In fact, in April 2010, the company had to sell assets worth staggering $38 billion to execute legal compensations.