More than 17% of London-based BP plc's shareholders Thursday voted down an executive remuneration package that would give CEO John Browne a generous compensation package when he retires in July.
Browne will retire from BP with a $10.5 million (5.3 million pound) retirement package in July and a $42.9 million (21.7 million pound) pension. He also will receive millions of company shares under an incentive program over the next three years.
The measure passed with a majority voting for it, but Chairman Peter Sutherland took some heat during the company's annual meeting. BP, and especially Browne, have come under fire for several incidents in the past few years, including an explosion that killed 15 people at its Texas city refinery in March 2005, a major oil spill at its Prudhoe field in 2006, and a federal investigation into trading irregularities in the propane, oil and gasoline markets (see Daily GPI, Aug. 30, 2006).
Browne, 59, announced his retirement in January; he originally planned to retire at the end of 2008 (see Daily GPI, Jan. 16).
Questioned about the executive pay package given BP's total shareholder return, which one shareholder said was lower than its peers, Sutherland replied that BP's earnings per share in 2006 were actually higher in percentage terms than its peers. He also noted that BP's dividend growth in the past two years was higher than competitors.
BP's senior executive bonuses have been cut in half because of concerns about the company's safety record, Sutherland noted. He added that only 30% of the maximum potential shares were awarded to executives this year, which was lower than the 37.5% of the maximum shares awarded in 2006.
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