May 4, 2017 / 12:59 PM / 2 years ago

Advisory firms urge BP shareholders to back revised pay scheme

FILE PHOTO: Bob Dudley, CEO of BP, speaks during an interview at the Argentina Business and Investment Forum 2016, in Buenos Aires, Argentina, September 14, 2016. REUTERS/Enrique Marcarian/File Photo

LONDON (Reuters) - Three investor advisories have recommended BP (BP.L) shareholders vote in favor of a new remuneration policy after the oil and gas company lowered Chief Executive Bob Dudley’s pay scheme, according to notes to clients seen by Reuters.

ISS and the Local Authority Pension Fund Forum (LAPFF) joined a third advisory, Glass Lewis, in the recommendation to back a remuneration policy that will run from 2017 onwards.

Another advisory, Pensions & Investment Research Consultants (PIRC), urged shareholders to oppose the policy.

Executive remuneration has become a major source of friction between companies and investors after the collapse in oil prices in 2014 which led to a sharp drop in profits. BP recorded its largest loss in 20 years in 2016.

“We have worked closely with our major shareholders to develop a new remuneration policy,” a BP spokesman said. “We are pleased to see that the three largest proxy advisors have all reacted positively to the new policy and remuneration report.”

ISS also recommended the approval of Dudley’s $11.6 million salary in 2016 after it was slashed by 40 percent following an investor uproar last year. The non-binding vote on that issue will be held at BP’s May 17 annual general meeting.

“The company engaged with shareholders since then and has put forward remuneration proposals with many positive amendments over the previous structure and approved policy,” ISS said in a note calling for a vote backing the 2017 remuneration policy.

LAPFF did not provide any recommendation on the 2016 remuneration.

Reporting by Ron Bousso; Editing by David Goodman and Edmund Blair

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