More than a third of BP investors opposed the oil major's executive pay plan on Thursday and its chairman came under fire for his role as a non-executive director of nationalised lender Royal Bank of Scotland. BP said 37.6 percent of investors who voted ahead of the company's Annual General Meeting - the vast majority of shareholders who express a preference - opposed its remuneration report.
Last year, about 12 percent voted against the report. Some investors were unhappy the board had made discretionary payments to top managers including the Chief Executive Tony Hayward, but a spokesman said the pay plan was appropriate. One BP insider said the vote reflected the fact institutional investors felt under pressure to take a robust line with managers of the companies they invest in, after the financial crisis highlighted mismanagement at so many public companies.
Some small investors criticised the reappointment of Chairman Peter Sutherland and a proposal - recently dropped - to reappoint Tom McKillop as a non-executive director, based on their links to RBS. Sutherland was a non-executive director at RBS from 2001 until it was rescued from collapse by a government bail out. McKillop was chairman, a role for which he has been pilloried by British politicians and media.
McKillop stepped down from the BP board earlier this month. Sutherland said he did so to avoid any embarrassment to the company even though the BP board, and many investors, had supported his reappointment. However, several small investors voiced anger about Sutherland and McKillop's RBS roles. "When Sir Tom's job is untenable, I do not understand why your job is not (untenable also)," one small shareholder told Sutherland at the meeting.
However, 95.9 percent of investors backed Sutherland's reappointment. This was down from 98 percent last year. BP Plc produced just over 4 million barrels of oil equivalent per day in the first quarter of 2009, Hayward said, up about 2.5 percent on the same period a year ago.
There is no prospect of Europe's second-largest publicly traded oil company by market value merging with Exxon Mobil Corp , the world's most valuable listed oil company, despite occasional speculation, Sutherland said.
Sutherland also said he does not foresee any change in BP's credit rating, despite a big fall in revenues on the back of an almost $100/barrel drop in oil prices since July. "We don't see any reason for a downgrade," he said. BP shares traded up 2.3 percent at 439-1/2 pence/share at 1455 GMT, outperforming a 1 percent rise in the DJ Stoxx European oil and gas sector index.
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