BP chief executive Tony Hayward received a bonus for 2007 that was higher than the award granted to Lord John Browne, his predecessor, in 2006, but he missed out on a long-term share package worth around £2.4m because of the oil company's poor past performance, according to the oil group's annual report.
The report, published yesterday, revealed that Hayward, who became chief executive in May 2007, was awarded a bonus of £1.26m for 2007. That compared with £900,000 for Browne in 2006. Browne resigned as BP's chief executive in May 2007 after a court decision to lift a legal injunction preventing the media reporting details of his private life.
Hayward began a comprehensive restructuring of the company in October, following a turbulent year in which its Alaska oil field was partly shut down because of leaks in a pipeline, and the company was fined millions of pounds for environmental crimes and fraud.
The company last month reported that 2007 net profit fell 5.5% to $20.8bn, despite a 6.2% rise in revenue to $291.4bn.
In contrast, two of BP's main competitors reported a surge in earnings. Royal Dutch Shell, Europe's largest oil company, reported a 23% rise in full-year earnings to a record $31.3bn, while Exxon Mobil posted the largest annual profit yet by a US company with net earnings of $40.6bn. BP's top five directors, including Hayward, missed out on share awards worth a potential £10.7m because of the com- pany's poor performance. The five were granted no shares at all from a possible 2.2 million under the group's 2005-2007 share incentive scheme, according to the annual report.
"Performance failed to meet satisfactory levels and consequently no shares will vest in the plan for 2005-07," the report stated.
Separately, BP increased the funds it set aside to settle claims arising from the 2005 fatal explosion at its Texas City refinery to $2.13bn (about £1.06bn).
The revised figure for claims relating to the Texas City accident, which killed 15 workers, compares with the $1.6bn (£800m) provision previously disclosed by the company.
BP said it is still holding talks with the US Chemical Safety Board on the final recommendations to be drawn from the accident, following the board's report a year ago.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article