BP is reported to be on a potential collision course with investors over a bumper bonus of up to £11.4million for its chief executive, fuelled by booming energy prices.
Bernard Looney - a former managing director for the company's North Sea operation - could be paid the sum under a three-year share award plan dating from 2020.
The Sunday Times says BP has been consulting investors ahead of the annual report as to whether it should curb the size of windfalls for Mr Looney and senior executives.
The FTSE 100 giant has already encountered strong views, with one leading shareholder telling the newspaper that payouts towards the top of the range would amount to “quite a blatant grab” given the huge rally in oil and gas prices.
BP’s executive pay package includes share awards that mature after three years. Mr Looney is entitled to five times his salary; while finance director Murray Auchincloss gets four-and-a-half times.
In August 2020, when the 2020-22 plan was drafted, BP’s share price was in the doldrums as Covid lockdowns had smashed demand for energy.
Shares
The £3.08 share price resulted in Mr Looney being given just over two million shares with a face value at the time of £6.4million. Mr Auchincloss got almost a million shares with a face value of £3.1million.
Since then, BP’s shares have risen – closing on Friday at £5.51.
If the scheme paid out in full now, Mr Looney would receive £11.4million and Mr Auchincloss £5.5 million.
These payouts would come on top of salaries and annual bonuses, bringing Looney’s package to £15.4million and Auchincloss’s to £7.7million, assuming other elements stayed the same.
The scale of the payouts is determined by a combination of total shareholder returns versus a peer group, return on capital and strategic progress.
The Sunday Times said that BP declined to comment.
FTSE 100
The UK's top share index, the FTSE 100, was up 54 points at 7,933 shortly after opening this morning, following Friday's 29-point loss.
Brent crude futures were down 0.47% at $82.77 a barrel.
Companies reporting today
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