CHIEF executive Bob Dudley’s pay will come under close scrutiny as investors gather for oil giant BP’s annual general meeting on Thursday amid falling profits and rising costs from the Gulf of Mexico.
Dudley, who took up the reins just months after the Deepwater Horizon oil spill in 2010, took home £1.8 million in pay and bonuses in 2012 despite profits plunging by 18 per cent to £11.7 billion.
Some 11 per cent of votes at last year’s AGM were cast against BP’s pay report, under which Dudley was awarded a bonus worth £564,000.
Dudley has since seen his overall remuneration fall by 21 per cent, which could placate some shareholder anger.
BP recently warned that the cumulative cost of the Deepwater Horizon disaster had reached £28bn.
The group may yet face more financial pain from the spill after a New Orleans court ruling meant BP may have to pay billions of dollars more in compensation to victims.
While it had previously agreed to set aside £5.6bn to cover claims for economic and property damage from the explosion and spill, the court ruled that a more-generous interpretation of the payout agreement should be used.
BP plans to appeal, but it heaps yet more pressure on the group as it stands trial in New Orleans accused of gross negligence prior to the accident three years ago, which killed 11 workers and caused the worst oil spill in United States’ history.
There was some cheer recently for investors after BP set aside £5.3bn for shareholders as part of an immediate return from the reshaping of the oil giant’s Russian business.
Motley Fool editor Maynard Paton said: “When that buyback is complete, my rough sums suggest BP’s dividend might be knocking on for something like 26p per share during 2014.”
Under a transaction struck in October, BP sold its 50 per cent stake in TNK-BP to Russia’s Rosneft for £8.3bn in cash and Rosneft shares.
BP now owns 19.75 per cent of Rosneft.