Shareholders in oil giant BP gave the company’s board a symbolic slap in the face when they voted to reject its remuneration report for the last year, which included a pay deal of $19.6 million (£13.8m) for chief executive Bob Dudley.
Almost 60% of shareholders rejected the report, which allowed Mr Dudley’s pay package to rise by 20% on the previous year, despite the group posting its largest annual loss for 20 years and axing thousands of jobs worldwide.
The vote against the pay deal is only advisory as shareholders have no power to veto it and Mr Dudley has already been paid.
But the large percentage of those voting against it showed the depth of shareholder displeasure.
Just 40.89% of BP shareholders voted to approve the package, while 59.11% voted against it.
Chairman Carl-Henric Svanberg told the company’s annual general meeting in London that Mr Dudley and his team had put in a “seriously impressive performance”, particularly against a backdrop of falling oil prices in a volatile and fragile market.
But he faced difficult questions from shareholders, including one from a representative of the Church of England about the morality of rising pay, and from others about whether they were suitable in times of austerity.
BP has promised to review its remuneration policy ahead of next year’s meeting, with new proposals due to be put forward for shareholder approval in 2017.
Professor Dame Ann Dowling, a non-executive director of BP, said she would personally engage with some of the major shareholders when carrying out the review.
“We are going to review the remuneration policy to see how we can simplify it while retaining a strong link to long-term performance.
“We will certainly review the measures and criteria that we use to judge performance, including how in the future we deal with changes in oil price and also the link to shareholder value.”
She said it was important to reward people appropriately to attract talented employees, but shareholder Captain David Hawker called the AGM a “PR disaster” and said huge pay rises for bosses were wrong when normal people still faced tough times.
“The situation today in this country and in much of Europe is austerity, and while so much of our population much accept austerity, it is not the time to increase directors’ remuneration.”