BP investors poised to voice anger at executive bonuses

BP investors poised to voice anger at executive bonuses

10 April 2011

London. BP is preparing for an acrimonious showdown with investors at its annual meeting on Thursday as disgruntled shareholders object to boardroom bonuses and US Gulf Coast residents fly to London to confront top directors over last year's Deepwater Horizon oil disaster.

The Association of British Insurers (ABI) has issued an "amber top" alert to fellow institutional investors warning them to examine the issues surrounding bonuses of more than £100,000 to two of BP's top executives – finance director Byron Grote and downstream chief Iain Conn.

Critics view the payments as inappropriate following the environmentally catastrophic oil spill. BP argues that the executives met targets in their particular roles and that neither played any part in its offshore exploration division.

"Shareholders have to decide if they think these bonuses are appropriate after the year the company had," said an ABI spokesman.

Meanwhile, the corporate governance consultancy Pirc has urged investors to oppose BP's remuneration report over payouts to outgoing executives, including former chief executive Tony Hayward, who got £1m compensation for loss of office and has share awards yet to vest worth as much as £8m. Glass Lewis, a large US shareholder advisory firm, is urging a vote against BP's report and accounts.

BP is approaching the first anniversary of the blowout of its Macondo oil well off the Louisiana coast. The explosion last April of BP's Deepwater Horizon rig killed 11 people and caused a spill that polluted fishing areas and fouled hundreds of miles of beaches. Groups including Greenpeace and Christian Brothers Investment Services will make their voices heard. Some will attempt to present BP with a "black planet" award for ecological failures.

A delegation from the Gulf Coast will be at the meeting, to be held at the ExCel centre in Docklands. Among them will be Diane Wilson, a fourth-generation shrimper from Texas who was arrested last year for pouring an oil-like substance over herself in a congressional committee room while Hayward was giving evidence.

Wilson says oil is still washing up on the beaches around her home town of Seadrift, Texas – and that paperwork surrounding compensation for victims is impenetrable. She told the Observer she is planning "something more than just getting up" and asking a question: "What they're messing with is an entire way of life."

Others object to BP's £1.6bn "Sunrise" project to excavate oil from Canada's tar sands. But unlike last year, there will be no formal resolution protesting at BP's conduct.