Ahead of BP’s annual general meeting on Thursday, the Institute of Directors urged shareholders to scrutinise the pay deal for Bob Dudley, BP’s CEO, arguing that, if endorsed, it could send the “wrong message” to other companies. Simon Walker, Director General of the Institute of Directors, said:
“It is rare that the IoD intervenes on the subject of an individual chief executive’s pay. We are concerned, however, that Mr Dudley’s £14million pay package will seem unjustified to many shareholders, considering the performance of the company over the last 12 months.
“BP is not a badly run company, and its current woes are common to other firms in the sector. Nevertheless, the UK Corporate Governance Code is clear that pay should be tightly linked to performance and that targets should be stretching and rigorously applied. Should the pay package be approved, it could send the wrong message to investors and other boards. We therefore urge all shareholders to scrutinise the pay deal of Mr Dudley very closely.
“If his pay deal is approved, but with a significant minority voting against, the BP board must explain how it will engage with this group of shareholders – they cannot and should not be ignored”.