The chief executive of BP took a 32% pay cut last year, according to the oil giant’s annual report – as the company’s share price slumped to four-year lows.
Lord Browne of Madingley saw his remuneration cut from £5.7m (€8.38m) in 2001 to £3.9m (€5.73m) last year, reflecting the problems that have wracked Britain’s biggest listed company and its share price.
A spokesman for BP said: “This (cut) reflects the performance of BP against other companies in the sector and against other companies generally.”
On top of the falling share price, BP’s profits declined by 25% to around £8.7bn (€12.79m) last year and analysts put much of this profit down to the strength of oil prices.
After stripping out long-term performance plans, Lord Browne’s actual salary and bonus was little changed at £3.031m (€4.457m) – the equivalent of almost £12,000 (€17,649) for each working day.
The payout included a performance-related bonus and other benefits.
David Blundell, national chairman of the UK Shareholders Association, said: “Even though the share price at BP has under-performed, Lord Browne is still earning very good money.
“The point is that this has been a trend over the past 10 to 15 years of senior executives of the larger listed companies receiving quite breathtaking levels of earnings for, in most cases, under-performance.”.
Institutional investors are also concerned about the trends in remuneration packages which they see as reward for failure, but which many companies argue are necessary to attract and keep the best managerial talent.
A spokesman for the National Association of Pension Funds, which represents the interests of occupational pensions, said: “There is absolutely no problem in people getting paid world-class salaries as long as they also achieve world-class results.”
Lord Browne, 54, was appointed an executive of BP in 1991 and group chief executive in 1995.
Besides his role at BP, he is a non-executive director of investment bank Goldman Sachs and technology company Intel. He is also a trustee of the British Museum.
BP’s remuneration committee – which approves salaries and bonus schemes – is expected to review the salaries it awards executives later this year.
The annual report said executive bonuses would again be based on a mix of demanding financial targets and other leadership objectives, established at the beginning of the year.
Along with most of the companies which make up the blue-chip FTSE 100 Index, BP’s share price has fluctuated amid market uncertainty about looming conflict in the Middle East and its effect on world oil supplies.
BP shares, which hit four-year lows after a downgrade in October, were down 4p at 411p today.