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BP chief executive Murray Auchincloss’s pay fell 30 per cent to £5.36mn last year after the struggling oil major failed to hit key profit and operation targets.
Auchincloss’s base salary remained unchanged at £1.45mn in 2024, but his share awards dropped sharply to £2.75mn from £4.36mn a year earlier after the company missed its earnings, cash flow, reliability and energy transition goals.
Last month, BP tore up a five-year-old strategy to become a leading green energy company and Auchincloss promised the group would instead focus on oil and gas, and sell $20bn of assets in the next two years.
BP, which has committed to cutting spending on renewable energy by 70 per cent as it reset its strategy, said it would now remove its recently-introduced energy transition targets from its bonus calculations for the current year.
The oil company is under pressure from activist investor Elliott Management, which has built an economic interest of nearly 5 per cent in BP and called for drastic action to reverse years of underperformance.
In its annual report published on Thursday, BP said it had commissioned Independent Board Evaluation, a consultancy, to carry out its annual board performance review, which was done internally the previous year.
After considering a report from IBE — founded by Ffion Hague, the author and partner of former Conservative party leader Sir William Hague — BP said it would take action on succession planning for its board and senior management.
The group also said it would focus on ensuring it had a “culture where members of the leadership team are held to account for performance delivery and capital allocation”.
In the annual report, Helge Lund, BP’s chair said the group was looking for new board members and was particularly targeting people with experience in “industrial companies both from within and outside of the sector”.
On Thursday, BP said it had appointed Ian Tyler, former chief executive of Balfour Beatty and senior independent director at mining company Anglo American, to chair its remuneration committee, subject to approval at its annual general meeting.
Like BP, Anglo American has recently been a target for activist investor Elliott Management.
Auchincloss’s 2024 pay packet is likely to be significantly smaller than that of Shell boss Wael Sawan, who received just under £8mn in 2023. Shell has yet to publish its 2024 annual report.
Meanwhile, Lund, who has also been criticised for overseeing BP’s failed previous strategy, saw his salary increase by 4.4 per cent to £845,000, although his overall package remained roughly unchanged at £882,000.
