The pay of Bob Dudley, BP‘s chief executive, tripled last year despite the legal threats still hanging over the company from the Deepwater Horizon disaster.
The oil boss received $8.7m (£5.2m) in salary, bonus and share awards last year, according to the company’s annual report, compared with $2.6m in 2012.
When contributions to his pension were included, Dudley, 58, got $13.2m for 2013 and has already accumulated a retirement package worth $2m a year.
The American took over at BP towards the end of 2010 after the exit of Tony Hayward, who led the group during the disastrous blowout in the Gulf of Mexico.
BP has already paid out billions in compensation for the worst environmental accident in US history and could yet be found guilty of gross negligence by the US department of justice, which could bring penalties of up to $20bn. It has also failed in court to stop what it believes are “absurd” compensation payments to victims who do not need to prove financial loss from the spill.
The share price has recovered from the immediate aftermath of spill but, at 486p, it is still far below the 650p it had reached just before the disaster in 2010.
The company is also facing potential difficulties after taking a 20% stake in Russia’s largely state-owned oil group, Rosneft last year, given the threat of sanctions against Moscow over the Crimea crisis.
But the company said Dudley had taken steps to re-establish a good financial and safety record since he had been in charge.
“BP has made strong progress over the past three years under Bob Dudley’s leadership – particularly in areas such as safety, operations and building for the future through reserve replacement – and his remuneration reflects this,” said a BP spokesman. “The great majority of his potential pay is directly dependent on BP’s performance in areas essential both to the delivery of the company’s strategy and to the long-term interests of its shareholders.”
City analysts have praised Dudley in recent times for putting more emphasis on the interests of investors with a focus on dividends and share buybacks.
“Others tell this story but we suspect BP ‘gets it’ (the need to maximise returns for investors) more than most, given its travails in recent years,” said Investec Securities in an equity note this week. But the oil and gas analyst Neil Morton retains a “hold” recommendation on the BP shares and a target price of 460p per share.
Dudley has already disposed of around $40bn of assets and in October BP said that it expected to sell off a further $10bn of assets by the end of 2015, with the proceeds largely used to fund share buybacks.
The new BP prides itself on being smaller and more streamlined with a decision earlier this week to hive off its onshore oil and gas assets in the US into a separate business to be run autonomously. Dudley has not ruled out a separate stock listing for this operation at some point.
The increase in Dudley’s pay during 2013 was accentuated by a relatively lower level for him during 2012 when the company’s difficulties were deemed that much more profound. The £5.2m figure compares with his head of downstream operations, Iain Conn who received £3.4m, up from £1.8m in 2012, while finance director Brian Gilvery received £2.1m last year compared to £1.4m in 2012.
Makati1 on Sun, 9th Mar 2014 3:32 am
No one is worth $8,700,000.00 per year. Not even $1,000,000.00 per year. THIS is why Capitalism is dying and the world is in trouble. GREED in capital letters. Bring back the 94% tax bracket for these people. (1945)
GregT on Sun, 9th Mar 2014 6:00 am
If Bob Dudley has any common sense, he will be spending his 8.7 million dollar windfall on preparations for a very different future. If he does not, he will find himself like most everyone else, in very dire circumstances.
peakyeast on Sun, 9th Mar 2014 11:16 am
I do not understand what they want all this money for. I could retire comfortably after less than 1 years salary…Heck even after 1 month. A year might actually put a mark on my head for kidnapping and extortion.
If these CEOs are worth their money it can only be because of nepotistic behavior in the higher circles and mafialike constructions – it certainly aint because of actual work they put into it.
Davy, Hermann, MO on Sun, 9th Mar 2014 1:17 pm
This is just another ongoing example of the global elite engaged in wealth transfers on a global scale. It is going on throughout the world. Even when it is not directly visible, as in the case of BP executives, wealth transfer is by some other means. The global elite have the tools at their disposal for remaining wealthy and enriching themselves through the new global economic realities. As the globalist model fails these folks will crash and burn. A contracting or collapsing global economy will not support so many thieves. Some will remain, the really smart, connected, and prepared. They will become the new feudal lords or war lords in various localities. The vast majority of these very wealthy are really not that smart. The system has been rigged to allow this wealth to flow to them. In many cases their poorer neighbors will rise above them through toughness and resilience.
Kenz300 on Sun, 9th Mar 2014 6:56 pm
The top 1% keep increasing their wealth.
The 99% – “Not So Much”.
Yet people keep electing politicians that have a top 1% agenda. Nothing like voting against your own best interests.
The billionaires that own the RepubliCON party are trying to own everything.
rockman on Sun, 9th Mar 2014 7:17 pm
“…the global elite engaged in wealth transfers on a global scale.” Actually I would substitute corporations for “elite”. The money has gone to BP. How that revenue is divided within BP is between the board of directors and the major shareholders. I’m pretty sure that if they cut his salary in half they wouldn’t give the other half back to the buyers of BP products in the form of a rebate. LOL.
The salaries of the just the 216 professional level USA BP employees totals $20 million/yr. The 1310 BP employees in Alaska have a payroll of $171 million. Companywide total salaries? Couldn’t find it but given BP has 85,000 employees worldwide I would guess a total of at least $5 billion. So the CEO’s salary represents no more than 0.15% of the total salaries BP pays out annually. So I doubt his salary bump will have much of an impact on the price at the pump. LOL.
And he hasn’t been the only one treated nice by BP: Senator Mary Landrieu (Democrat – La.) received more campaign funds from BP than any other member of Congress. Sure…it’s not like BP caused the worst environmental nightmare off the coast of her state. Wait a sec… LOL.
rockman on Sun, 9th Mar 2014 7:20 pm
Kenz – You have to admit that the billionaires that own the Democrat party aren’t doing to badly either. LOL.
steveo on Mon, 10th Mar 2014 12:37 pm
peakyeast “I could retire comfortably after less than 1 years salary…Heck even after 1 month.”
The money itself, and its buying power are meaningless to these people. They use their “net worth” to keep score like the score on a net linked video game, except instead of an anonymous handle they see names like Gates and Buffet to compare against.