BP shareholders reject chief Bob Dudley's £14m pay deal

BP shareholders have rejected a pay package of almost £14m for chief executive Bob Dudley at the oil company's annual general meeting, the BBC reports. 

Just 40.89% of investors approved Mr Dudley's 20% increase, which was awarded despite a fall in profits and thousands of job cuts at the oil giant.

The vote is non-binding on BP, but earlier, chairman Carl-Henric Svanberg promised to review future pay terms.

Full voting details will be released later, with some investors abstaining.

But corporate governance adviser Manifest said it was the fifth-largest vote in the UK to date against a boardroom remuneration deal.

In his opening address to the shareholders' meeting, before the vote had been formally announced, Mr Svanberg acknowledged the strength of feeling, saying: "Let me be clear. We hear you."

He continued: "We will sit down with our largest shareholders to make sure we understand their concerns and return to seek your support for a renewed policy."

"We know already from the proxies received and conversations with our institutional investors that there is real concern over the directors' pay in this challenging year for our shareholders.

"On remuneration, the shareholders' reactions are very strong. They are seeking change in the way we should approach this in the future," he said.

Shareholders that criticised the pay deals included Aberdeen Asset Management and Royal London Asset Management.

Investor group Sharesoc branded the pay deal "simply too high", while Glass Lewis, ShareSoc, Pirc and Institutional Shareholder Services have also expressed their opposition.

And the Institute of Directors warned on Wednesday that the pay increase risked sending "the wrong message to other companies".

IoD director-general Simon Walker said the "pay package will seem unjustified to many shareholders, considering the performance of the company over the past 12 months". Last year, BP made a £3.6bn loss and announced that thousands more jobs would be cut.

Earlier on Thursday, Ashley Hamilton Claxton, corporate governance manager at Royal London, told the BBC: "The executives received the maximum bonuses possible in a year when [BP] made a record loss, and to us that just does not translate into very good decision-making by the board.

"We think it sends the wrong message. It shows that the board is out of touch."

She told the BBC's Today programme that if 20%-25% of shareholders vote down the pay deal, it would force BP to "think long and hard about their decision".

The early voting figures suggest that the opposition is even bigger that she expected.

BP's pay policy is subject to a binding shareholder vote every three years. It was last set in 2014, meaning new proposals are due to be put forward for shareholder approval again in 2017.