UPDATE 1-Investor opposition to BP executive pay wanes

Thu Apr 11, 2013 12:00pm EDT

LONDON, April 11 (Reuters) - The shareholder rebellion against BP's remuneration policy shrank this year, after the oil major made progress in untangling its Russian investments and reducing uncertainty over oil spill liabilities.

Investors representing just 5.88 percent of shares voted against its 2012 remuneration report at a meeting in London on Thursday - almost half the 11.79 percent that rejected the report the previous year.

Chief Executive 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 year of its disastrous Gulf of Mexico oil spill.

Standard Life Investments (SLI), one of BP's largest shareholders with 1.3 percent, attacked the company's current pay policy for its potential to reward bosses for meeting unchallenging targets.

Three years on from the oil spill, and a month after completing a landmark deal in Russia which is enabling BP to return $8 billion to shareholders, SLI's criticism prompted loud applause in the meeting but received less support than last year.

While BP remains in court in the United States over the spill, it has already made some partial settlements. Investors, buoyed by the recent sale of its stake in its Russian venture TNK-BP, have started to price in an end to the spill saga.

SLI has voted against BP's executive pay in seven of the last eight years and criticised its remuneration policy for being too complicated.

"We want to see the remuneration committee raise its game and make significant improvements to address our concerns," SLI's global head of governance and stewardship Guy Jubb said.

A 5.88 percent vote against executive pay is small by the standards of 2012 when a large number of investors in British companies registered their disapproval during annual meetings, an episode dubbed the 'shareholder spring'.

BP, accustomed to criticism from environmental groups, also heard from a number of individuals and groups campaigning against its involvement in Canada's tar sands.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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