LONDON (Reuters) - The chief executive of Europe’s largest oil company by production, BP Plc, enjoyed a 41 percent rise in total pay in 2009, even though profits dropped 45 percent.
Tony Hayward took home 4.01 million pounds ($6.03 million) in salary, cash bonus and share awards last year, up from 2.85 million pounds in 2008.
The head of BP’s remuneration committee, DeAnne Julius, said in the company’s annual report that the increase was to reward Hayward for boosting operational performance.
BP reported a 4 percent rise in crude production in 2009, compared with stagnant or lower output at rivals, and the company’s refineries ramped back up to full production after outages.
BP’s profit collapse was due to the sharp fall in oil and gas prices compared with record levels seen in 2008.
BP says its pay plan is structured to ensure that executives are paid based on the underlying profitability of the company and to avoid managers enjoying windfalls simply because oil prices surge.
BP said it also beat the share performance of its peer group, the supermajors Royal Dutch Shell, Total, Exxon Mobil and Chevron.
Hayward’s pay packet is in line with the $6 million that Peter Voser, the CEO of rival Shell, earned in 2009, though Voser only assumed the top job in July. In 2008 his predecessor Jeroen van der Veer earned $13 million.
Rex Tillerson, the CEO of Exxon, the largest non-government controlled oil company in the world by market capitalization, was paid total compensation worth $22.4 million in 2008.
The CEOs of successful oil explorers often earn much more than their “big oil” counterparts.
BP also said it proposed that in future a portion of senior managers’ annual bonuses should be deferred, echoing a similar move by Shell last month.
(Reporting by Tom Bergin, editing by Will Waterman)