BP, the British petroleum giant said it reduced remuneration of Bob Dudley, the CEO of the group by 40% in 2016 calendar year.
The company made the disclosure in its 2016 full year report.
The company said Bob Dudley’s total remuneration for 2016 was $11.6 million, 40% lower than received for 2015.
In reaching their final decisions, BP said its remuneration committee considered results from the current remuneration policy alongside outcomes for shareholders, and exercised downward discretion. This use of discretion reduced Bob Dudley’s 2016 remuneration by $2.2 million.
BP said the proposed policy is designed to be simpler and more transparent, to more clearly link pay to shareholder outcomes and delivery of BP’s strategy, and to lead to lower levels of reward. The policy includes a lower ‘on-target’ annual bonus, more challenging stretch targets to achieve maximum annual bonus, and material reductions in the maximum longer-term incentives available to executive directors. As a result, the maximum potential opportunity for the Group Chief Executive will be reduced by $3.7 million, and achieving this maximum will also be significantly more challenging.
Commenting on the disclosure, Professor Dame Ann Dowling, chair of the remuneration committee, said “After a thorough review and extensive shareholder engagement, we believe the new policy is simpler, more transparent and has strategic focus.”