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Post-spill performance costs BP boss his share bonus
LONDON, March 6 |
LONDON, March 6 (Reuters) - BP Plc boss Bob Dudley's pay fell by a fifth last year because of performance measures set over a three-year period that began in 2010, the oil-spill year.
The company's 2012 annual report released on Wednesday shows a zero in the column for performance shares where chief executive Dudley earned some $788,000 in 2011.
The performance measure, applied by BP's own auditors, is based on oil and gas production growth, profitability in the refining, marketing and chemicals division, and underlying net income growth over the past three years, all measured against its peers. The peer group is ExxonMobil >, Shell , Chevron, Total and ConocoPhillips .
First place in the group results in a 100 percent vesting of stock, second place results in a 70 percent payout, and coming in third results in a 35 percent vesting.
"As the starting point for all measures was before the Deepwater Horizon accident, the impact of this continues to be dominant," the report said. "Results for all measures were below the third place required and so no shares vested."
Dudley's total pay, including salary, bonus, and shares, fell 21 percent to $2.673 million from $3.404 million a year earlier, even though his salary and bonus both increased.
BP's annual report was released during the second week of BP's trial in a New Orleans court over the spill, which happened when the Deepwater Horizon rig exploded and sank, killing 11 men. The Macondo well it was working on spewed some 4 million barrels of crude into the Gulf of Mexico in the United States' worst offshore oil spill disaster.
BP has already been forced to sell a large chunk of its business, raising some $37 billion to pay for cleanup costs, fines and compensation which already more than match this amount.
The effect has been to reduce its cash flow - a basic measure of earning power - by some $5 billion a year, or 14 percent.
Plaintiffs are seeking tens of billions of dollars in further damages and fines.
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