BP chief executive not paid bonus

BP has not paid its chief executive a bonus in the wake of the Gulf of Mexico oil spill, according to its annual report, but two senior directors will receive combined payouts worth nearly £700,000 on top of their regular salaries.

Chief financial officer Byron Grote and chief executive of refining and marketing Iain Conn were awarded £380,000 and £310,000 respectively for hitting targets in their area of the business.

Chief executive Bob Dudley, who took up the top post in July, and his predecessor Tony Hayward, who presided over the company at the height of the Deepwater Horizon crisis, will not receive a bonus. Andy Inglis, former head of exploration and production, was also denied the additional payout.

The report added it was Mr Dudley’s view that no bonuses should be paid on group level results.

The period considered by the remuneration committee is one of the worst on record for BP. It included the Deepwater Horizon explosion, which saw 11 rig workers die on April 20, triggering the biggest offshore spill in history.

Defending the decision to award Mr Grote and Mr Conn bonuses, remuneration committee chairman DeAnne Julius said: “While the tragedy of lost lives and environmental damage remains foremost in everyone’s minds, the committee also wished to fairly acknowledge the good business results in many parts of BP, delivered in the most testing of times.”

Mr Conn has chosen to take two-thirds of his bonus as cash and defer the remainder as shares for three years whereas Mr Grote will take a third in cash and defer the remainder in shares.

Salaries for board members at BP have not increased markedly from 2009 to 2010 but Mr Dudley’s basic pay went up to 1.2 million US dollars (£722,188) from 750,000 US dollars (£460,900) in 2009 as he took the chief executive position.

Investigations are still ongoing into exactly what happened on the Deepwater Horizon rig on April 20, but a chain of events including mechanical failures and human error have emerged which could explain the explosion.

The company recently posted a loss of 4.9 billion US dollars (£3.1 billion) in the year to December 31, compared with profits of 13.9 billion US dollars (£8.7 billion) in 2009.