BP CEO Gets Huge Raise, after Record Loss, 5,000+ Layoffs

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Shareholders revolt.

By Charles Kennedy, Oilprice.com:

BP is facing a revolt from its shareholders over the salary of its CEO Bob Dudley.

Dudley’s salary jumped 20 percent in 2015 to $19.6 million, the same year in which BP reported a record loss of $6.4 billion and laid off more than 5,000 workers.

His rising salary has been met with opposition from shareholders because it is not only unseemly, but also because the raise is not connected to the company’s negative performance.

“We consider the pay of the CEO to be simply too high, and particularly so in a year when the company suffered a record loss of $6.4 billion in 2015. Even so his pay went up by 20 percent,” wrote shareholder advisory group ShareSoc, pressings its members to vote against the company’s proposed salaries.

Last week, other shareholder groups voiced their opposition to Dudley’s salary.

“This proposed increase is both unreasonable and insensitive. In a year in which BP has reported its worst ever annual loss, it has decided to sharply boost Mr Dudley’s remuneration,” Ashley Hamilton Claxton of Royal London Asset Management said. “We will be voting against this proposal. While we acknowledge BP has had to weather a turbulent period for oil markets, we strongly believe that executive remuneration should remain tied to performance.”

Other groups, such as Institutional Shareholder Services and Glass Lewis, agree.

BP has a set of metrics that help inform its executive salaries, and the board says the pay is justified. “BP’s performance surpassed the board’s expectations on almost all of the measures that determine remuneration – and the outcome reflects this,” a BP spokesman told Reuters last Friday.

In addition to the salary, BP and other top executives receive a pension, with the company paying around 35 percent of their salaries, another area of concern for shareholder groups.

BP has been hard hit by the downturn in oil prices and the costs stemming from the catastrophic oil spill in 2010 in the Gulf of Mexico. By Charles Kennedy, Oilprice.com

For oil producer Mexico, a nightmare is coming true. Read…  Debt Spiral Grips Both, Pemex and Mexico

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  16 comments for “BP CEO Gets Huge Raise, after Record Loss, 5,000+ Layoffs

  1. michael
    April 11, 2016 at 4:34 pm

    Stunning. Perhaps that is another reason not to own the stock, I wish I could get that kind of bonus for messing things up at work. I would be willing to do it for much less…..

    • Chip Javert
      April 11, 2016 at 5:11 pm


      Exactly how did the BP CEO mess up world oil prices? When is he going to stop doing this so BP makes a profit? I’d appreciate your knowledgable insight on these troubling issues.

      However, I do agree it’s stunning that the board of a shareholder owned company stepped into this cowpie. As an active investor, I have always wondered why shareholders are not REQUIRED by law (or at least USA law) to approve executive compensation (yea, I understand there are issues around short-term or temporary shareholders).

      If managers really work for shareholders, the least that could happen is they actually get paid by them.

      • Robert
        April 11, 2016 at 9:36 pm

        Well, they are entitled to withhold their vote for Dudley’s reinstatement- what I do not know is, if the majority of shareholders did so, can the Board of Directors override their decision.

      • interesting
        April 11, 2016 at 10:49 pm

        “Exactly how did the BP CEO mess up world oil prices?”

        well it is his job to see this coming, he is after all the “top talent” and that’s why he’s the CEO and why he makes top dollar. Now had he submitted a response saying if not for me we would have lost $10 billion and laid off 10,000 then he might have an argument.

        the CEO can’t have it both ways, you can’t be labeled “top talent” and not see the writing on the wall for oil prices and that market.

        just sayin

        • polecat
          April 12, 2016 at 11:18 am

          Ah..but they DO have it both ways!!

  2. Dan Romig
    April 11, 2016 at 5:54 pm

    Give me a few weeks to study the inner workings of BP, and I could do at least as well as Bob ‘Dudley Do Right …please just do a bit better at least’ has been doing. OK that may be a bit of a stretch, but not much. There’s quite a few sharp folks in the global oil business that could do the job – for a fraction of the price.

    Granted, BP does business in a very long time operating window. Plus they are in a very diverse set of locations with a lot of variables to plan for, and the oil patch has been roughed up lately. But BP is, and has been poorly run when you look at all the accidents they’ve had over the last decade.

    Bottom line: when you run the ship and you put employees out of work and you lose tons of money, you should be smart enough to just enjoy a boatload of cash for your services. Shareholder are right in asking Bob not to take a tanker of cash for running the ship aground!

  3. BoyfromTottenham
    April 11, 2016 at 6:48 pm

    Hi from Oz. I would love to see the formula that BP used to calculate Mr Dudley’s compensation, I want to get it written into my package! In the past, they just sacked me.

  4. April 11, 2016 at 11:53 pm

    Dudley lives and works in a bubble, the same bubble that contains all the ‘Brand X’ oil analysts who never saw the oil price drop coming, who don’t see it continuing, who keep believing in miracles … executives who are running their companies into the ground … who have absolutely no idea what is happening to their business and what to do about it.

    Dudley’s bubble excludes the poor, pathetic BP customers who are too broke to afford higher oil prices. Every time the central banks open the interest rate spigot, credit flows to firms like BP … and away from the customers. As the customers become poorer, the lower the price falls. Another year-and-a-half of ‘monetary cures’ and the oil price will be zero!

    But Dudley does not grasp this because the customer are ‘little people’ to be reamed completely as possible by Dudley and his buddies.

    Reaming all right. It won’t be long before BP itself is a reamed out, hollowed wreck. Absent cash flow, the entire petroleum industry is insolvent. At the same time there is a petroleum SHORTAGE (which is why prices are falling: the effects of shortage hits customers faster than it does firms that can still gain access to credit).

    Dudley should not have his pay cut he should be fired. Then again, it isn’t really his fault: after all he’s just giving the public what it wants: capital to waste.

    • polecat
      April 12, 2016 at 3:43 pm

      Kinda like that other ‘Dudley’…….first name is Bill I think……..who resides in another bubble (split between NYC & WDC)

      Jeez….you’d almost think they’re related !!

  5. frederick
    April 12, 2016 at 4:10 am

    what truly amazes me is that he is still around at all after the gulf spill debacle He should have been canned back then İMO

    • April 12, 2016 at 8:07 am

      The CEO at the time, Tony Hayward, was let go after the spill. Dudley was made CEO in June 2010 to save BP.

  6. walter map
    April 12, 2016 at 6:36 am

    Don’t you just hate it when corporate governance flaunts its blatant corruption and dares you to do anything about it? ROI isn’t all I want – I also insist on not being insulted and not made into a party to organised crime.

    BP should be subject to a corporate death penalty for the Gulf spill. They’re just lucky the dolphins can’t get an extradition treaty, otherwise the entire corporate hierarchy would be deeply, deeply, under water.

  7. ERG
    April 12, 2016 at 8:32 am

    I could be a CEO with my eyes closed. Here’s the ‘playbook’:

    [1] If the company has recently diversified, then consolidate.

    [2] If the company has recently consolidated, then diversify.

    [3] Never turn down an opportunity to reduce the number of employees.

    [4] Do whatever it takes to make your bonus (cf Rule 3).

    • walter map
      April 12, 2016 at 9:16 am

      That’s not the half of it. You also need to stack the board, get a compensation consultant, issue orders requiring the rank and file to buy the book you wrote detailing your achievements, make a deal with an offshore brokerage to trade on your inside information, and hire yourself a lawyer in Panama. Prepare your minions to reorganise the company and/or blame the previous management if anything goes wrong. And since you’re likely to be on the boards of umpteen other corporations, you’ll want to spend a few minutes having executive summaries read to you by someone who knows better than to bore you with the dull bits.

      It’s just not as altogether easy as it looks.

  8. April 12, 2016 at 8:36 am

    God would not be worth 20 million dollars a year and given the kaos the world is in he should be fired. After what BP did to the gulf it amazes me that they are still allowed to do business anywhere in the world.
    when did turning up the price at the pump become high tech. Its the same ol same ol. Bend over and crab your ankles.

  9. Normon
    April 14, 2016 at 3:33 pm

    The reason that BP gets away with all there debacle is that the Royal Family (“queen’) is the major owner of BP. Its all a fix for the rich. Much like Queen Beatrice of the Netherlands is primary owner of Shell.
    Always corruption from top to bottom and all their tax loopholes, they control with others most of the worlds wealth.

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