[Closed] 20% pay rise for BP boss, £14 million! I thought oil and gas were struggling?

just my humble opinion:

£14million? if that's what BP want to pay him, then why should i care? - with the caveat that he pays the same taxes as the rest of us.

Which we all know he won't.

"The executives received the maximum bonuses possible in a year when [BP] made a record loss,"

I wouldn't mind betting that for most of the organisation below that level the losses were used as a reason no bonuses were paid.

I really hope the shareholders tell Bob Dudley where to go, a 20% rise (even if BP were doing well, which I believe they are not) is obscene!

I can confirm that all employees had huge bonus payments in their March paypacket. My wife has just left the employ of BP and you would be amazed at how much money they pay their staff compared to any other business with the exception of tobacco companies.

We're actually discussing this in 'the' office this morning. He doesn't come in the top ~25 O&G CEO salaries however with this updated package he might. Simons- strangely the bonuses paid to all staff for 2015 were the largest (in terms of %) for over 10 years.

As the post above from Salad confirms.

Oil and gas at boardroom level is like the Tory party, they're so far removed from reality it hurts.

I kid you not, at a time when we were making huge redundancies around Christmas the weekly newsletter from the gods headlined with how the restructuring was good for everyone, making us leaner and more agile into 2016, and better able to meet customer needs. This was before those being made redundant had even left the building, and a lot of us were still waiting to hear if we were redundant.

Redundancy for everyone else - statutory plus a (derisory) bit.
Pay off when they finally sacked our CEO - £4million&change.

you would be amazed at how much money they pay their staff compared to any other business with the exception of tobacco companies.

As a soon to be ex-oil and gas employee, I'm not, but then most of the engineering side of things is competing with the requirements that they need the brightest and the best, and competing with the banks for them (one of the biggest employer of graduate Process Engineers is investment banking, it's all maths and problem solving at the end of the day).

I'll say one thing for the bank, at least when they were making people redundant and managing people out by the thousand and destroying people's investments, they had the grace to look a bit uncomfortable. Not "sorry" or "guilty" or "responsible", but at least aware someone might throw a brick at them

I can confirm that all employees had huge bonus payments in their March paypacket. My wife has just left the employ of BP and you would be amazed at how much money they pay their staff compared to any other business with the exception of tobacco companies.

That's not even limited to BP. The general reaction to bonuses this year has been "WTF? A Bonus? Are you Mental?" Followed quickly by "oh well if you insist!"

the head hunter on R4 this morning was spouting the "he'll leave because he's being hounded then who will they get ? no one would want a job where they will be bullied by the shared holders" bollox

Agree that shareholders should reject this at the AGM and challenge the remediation Committee to prove their worth. Otherwise none of my business.

An interesting stat for you:

If the [s]living[/s] minimum wage had kept pace with average boardroom pay increases since its introduction, it would now stand at well over 20 quid an hour

And....?

An interesting stat reflecting lots of things, but not how wages are determined.

If the minimum wage was £20 an hour, our dreadful productivity record would have resulted in significantly higher unemployment. You chose....

but not how wages are determined.

No one is worth £14 million a year. No one.

It's wrong on so many levels.

I am.

If the minimum wage was £20 an hour, our dreadful productivity record would have resulted in significantly higher unemployment. You chose....

Yet the boardroom occupants, with their enormous annual increases, who've overseen this collapse in this countries competitiveness, and dire productivity record, deserve their huge annual salary increases and massive bonuses because.....?

Just because....

[img] [/img]

If the minimum wage was £20 an hour, our dreadful productivity record would have resulted in significantly higher unemployment. You chose....

You're assuming everything else stays the same, which is unlikely. A higher minimum wage would encourage employers to increase productivity per employee.

Whilst I agree the salary is obscene, has anyone else looked at other Oil and Gas Ceo salaries? It would also be interesting to see how many of the companies you've actually heard of.

Binners +1

We seem to have a world where the top guys have convinced each other they are worth exorbitant salaries regardless of performance. Crazy.

From comments about bonuses across the industry though above, does seem to be very Alice in Wonderland.

Makes our greedy grasping politicians look like rank amateurs.

Possibly FF, but our (UK) track record is not that promising. But I wish that was the case.

Who said the CEO deserves it binners? That's for the shareholders and the remuneration committee to decide. I don't know the ins and outs but would doubt that £14m is justified but we have pretty lazy shareholders these days.

Lots of companies overpaying their CEOs who are delivering returns below their costs of capital. But shareholders have been poor at holding them to account. Look at our largest bank.....

That's for the shareholders and the remuneration committee to decide.

Its not lazy shareholders. Its self-interested ones. In a world where most shares are held by institutions, not individuals, everyone knows that 'remuneration committees' are just an insitutionalised corporate merry-go-round of rubber-stamping each others obscene pay increases.

Thats how we arrived at this patently ridiculous state of affairs

You scratch my back.....

Unsurprisingly binners that does not hold up to scrutiny. Indeed the reward (sic) in question has been the subject of intense debate over the past few weeks. The body that represents 20% of the shareholders has been lobbying against it as have other shareholders.

Only just clicked on the OP's link - the headline was a bit of a giveaway

The body that represents 20% of the shareholders has been lobbying against it as have other shareholders.

So what about the other 79%?

Well we will find out at the AGM but they also include other groups and individual investors - the link notes Aberdeen and Royal London AM for example.

At least the exaggerated nature of comments ^ match the reward itself.

No one is worth £14 million a year. No one.

Well, If someone came in and increased profits by 140 million, I'd be happy to pay them 14 million. They would be well with it too.

Clearly he hasn't don't that this year though. So it's hard to figure out why someone thinks [b]he[/b] is worth 14 million.

In a Devils Advocate defense of his pay; he's been paid £14million to run a loss making company, which is a bargain even if the next best guy wanted to do it for free and would have made £15million more losses (which would still be a drop in the ocean relative to the losses). Don't forget he has hit all his targets for the year, and may well have delivered the best outcome for shareholders given oil is bouncing along at about 1/6th what it used to be.

Whilst I agree the salary is obscene, has anyone else looked at other Oil and Gas Ceo salaries? It would also be interesting to see how many of the companies you've actually heard of.

Most of them, but then I work for a design contractor, so I've indirectly worked for a lot of them too.

Some of the numbers are obscene, but a lot of them will own large number of shares in the companies too, hence you get overall incomes like £80million at the top end (and an odd bias towards small-medium sized companies being at the top rather than Shell/Exxon/BP).

So what about the other 79%?

(Inferred from the tone of your post) logical fallacy, just because 20% don't support it, doesn't mean the remainder do, they're just not represented by the same group.

Well, If someone came in and increased profits by 140 million, I'd be happy to pay them 14 million.

So the CEO would be solely responsible for the increase?

No one else in the company would of been involved in the up turn?

I really like the idea of the top salaries being linked to ratio of the lowest.

[url= https://www.paycompare.org.uk/why-have-pay-multiples/ ]https://www.paycompare.org.uk/why-have-pay-multiples/[/url]

The body that represents 20% of the shareholders has been lobbying against it as have other shareholders.

So what about the other 79%?

[url= http://www.theguardian.com/commentisfree/2011/jan/06/executive-pay-remuneration-committee ]Heres how it works[/url]

I really like the idea of the top salaries being linked to ratio of the lowest.

And ignores the fact that being the CEO of a company employing 100,000 people is more difficult than being CEO of one employing 100, even if they have the same revenue, share price and dividend payments. Yet you'd cap the salary. Who'd want the big job?

US CEO's earn considerably more, £100m+ not uncommon so the amount is relatively modest on a global scale. There is a counter argument which says in these very troubled times you need the best people to try and navigate your way through the difficulties. I don't have a view on BP specifically.

As I have posted before if CEOs are limited to a multiple of lowest all those jobs will be outsourced to agencies. Such a pokicy would have little impact

Except binners, unsurprising, that is not how it works. Please read the OPs link and there is another background article in the FT from 7 April.

So gobuchul, what is a fair ratio and should it be the same across companies?

Who'd want the big job?

It was never a problem before.

[url= http://www.huffingtonpost.com/2013/04/30/ceo-to-worker-pay-ratio_n_3184623.html ]CEO to worker ratio ballooned 1000%[/url]

The ratio of CEO-to-worker pay has increased 1,000 percent since 1950, according to data from Bloomberg. Today Fortune 500 CEOs make 204 times regular workers on average, Bloomberg found. The ratio is up from 120-to-1 in 2000, 42-to-1 in 1980 and 20-to-1 in 1950.

And what should it be?

50:1 would seem to be reasonable IMO.

Now I wait for your painful economic arguments while these ridiculous pay levels are good for the economy and the general well being of all.

I cannot see how any intelligent, fair minded individual can defend these salaries.

And where does that come from? Would it apply to all types of company and who should set it?

Have I justified the salary? In fact....

- Member 
Agree that shareholders [b]should reject this[/b] at the AGM and challenge the remediation Committee to prove their worth. Otherwise none of my business.

POSTED 1 HOUR AGO #

It was never a problem before.

And it wasn't limited, and presumably shareholders, directors and whoever else decided that they could make more money by employing the best people, so competition for those few increased and salaries went up.

As I have posted before if CEOs are limited to a multiple of lowest all those jobs will be outsourced to agencies. Such a pokicy would have little impact

50:1 would seem to be reasonable IMO.

So you'd cap pay at £750,000

Yes that's a lot of money, but it's not exactly going to attract international companies to the UK is it? Even Wiggins and Froome would be digging out their Belgian/Kenyan passports.

Salary/compensation is low compared to the US

@neal how about if they reduced losses from what could have been £1bn to £500m ? (Made up figures as an example)

£500k total job income per annum cap sounds fair to me. Who the heck needs £14M or even £1M per year (which is ~76x the income of a 40-hour week at £7.20ph)?

What happens if that doesn't sound fair to someone else. Who is going to decide?

I cannot see how any intelligent, fair minded individual can defend these salaries.

Capitalism. Everyone wants to succeed and to succeed in many cases requires your company being better than the others or risk collapse. A cleaner in BP might be disgusted at his 'boss' getting $14m but if that was the best way to ensure his cleaning job remained secure and it cost him nothing (as new profits would dwarf it), I think he might think again.

Ive met a few very clever senior staff in O&G industry and its clear they are worth the money being paid (ive not met any millionaire level though) for what they are driving and steering the companies to achieve. I still dont think it appropriate to by paying multiple millions though, but its a world wide problem and its never going to go away as long as one company can get an edge over another.

Salary/compensation is low compared to the US

Maybe the CEO's of the British Equivalents of Apple, Amazon, Google and Facebook - their names escape me at the moment - should head over there where their genius and business acumen will be properly appreciated?

Bring on the Star Trek moneyless society! 😆

jambalaya - Member

Salary/compensation is low compared to the US

But that'd mean they'd all have already fled the country! That's what people do when they could make better money or pay less tax elsewhere, right?

People do leave the country. They also come into this country in certain sectors for the same reasons - how do you think we attract all of our super talented bankers?

It's like footballers pay - completely rediculous, but then again the numbers your talking in the oil and gas industry are a whole number of levels higher, so proportionally to the size of the business it's not completely out of kilter. The CEO costs millions, but the impact of his or her decisions is in the billions.

Also at that level the CEO's themselves are taking a big risk - They're only one decision away from the sack, and if they perform badly and their reputation suffers then their chances of getting another CEO role diminishes.

Having said that the numbers are hard to justify on a moral level - the by the same token it has been proven undeniably that on the working levels where most of us mere mortals operate, pay is a very poor incentive for productivity. The notion that you pay people more and you'll get more out of them is actually false. So there is little incentive for businesses to increase pay other than to stay in touch with competitive salary levels to retain staff. Companies that have reputations for treating their staff well and motivating their staff do it via other means than just renumeration. Ultimately we're all humans as actually crave respect and acknowledgement over pay and that's where good 'people companies' do well.

wobbliscott - Member
...the CEO's themselves are taking a big risk...

hang on, while i **** myself laughing.

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(breathes)
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you're kidding, right?

"oh no, they've only paid me (millions) for one years work, and now they've gone an sacked me (golden handshake)"

and these people are hardly dragged in off the street to begin with, this is clearly some strange use of the word 'risk' that i was previously unaware of.

£500k total job income per annum cap sounds fair to me

On the news last night,
[i]
"The study found that more than 10% of men who graduated from Oxford, Cambridge and the London School of Economics – considered among the best universities in the UK - were earning more than £100,000 a year 10 years after gaining their degrees, with former LSE students taking home the most."[/i]

Doesn't leave them much headroom for promotions before they're 40 if you want to impose a cap at that sort of level.

I'm probably (still 2 years to go, but with the oil price circling the drain it's not looking likely) not going to achieve that, but I don't begrudge those who do get ahead.

you're kidding, right?

"oh no, they've only paid me (millions) for one years work, and now they've gone an sacked me (golden handshake)"

It was explained on the news this morning that the £14m is the result of a previously agreed formula to determine the bonus, it's not plucked out of thin air today. The shareholder vote is retrospective and is not binding in any way. That money will be paid out.

This means all the investment funds can [i]pretend[/i] to be outraged, safe in the knowledge that absolutely nothing is going to happen about it.

I'm probably (still 2 years to go, but with the oil price circling the drain it's not looking likely) not going to achieve that, but I don't begrudge those who do get ahead.

Thats very magnanimous of you 😉

TINAS - You live in Reading ? And work for a design contractor ? Are you with Jacobs ?

TINAS - You live in Reading ? And work for a design contractor ? Are you with Jacobs ?

You saw nothing! (ducks into cubicle)

[could also be Fluor, ENI, AFW within a 25min commute, or 40min to Woking (KBR, Mustang, etc) or one of the smaller guys]

Thats very magnanimous of you

I'd like to think so.

I suspect the number working in Saudi, the Emirates etc is probably a similar percentage, so it's more a normal-ish salary + living in a repressive desert hell hole bonus.

Having worked in the O&G all my life I've seen the fat cats come & go.
I agree the salary's are ridiculous especially the young wanabees who'll all be crying now in Aberdeen as there 600 a day rate has been cut, new BMWs & Audis all going back to the main dealers as they can't afford them & the house prices falling like whores draws.

I resigned from BP Azerbaijan, had my fill of them, but you can guarantee this, one of Mr Dudleys goal will of been stream lining, cost saving call it what you may but it means getting rid of minions such as my self & enforce severe cut backs, which then makes him look good, oh look he's saved us millions so lets give him more...

Tired of all the bullS*t in the oil industry, time to ride my bike & pack it in at last.

I agree the salary's are ridiculous especially the young wanabees who'll all be crying now in Aberdeen as there 600 a day rate has been cut, new BMWs & Audis all going back to the main dealers as they can't afford them & the house prices falling like whores draws.

My facebook feed is like a more irritating version of "Rich kids of Instagram".

600/day? What were they, the tea boy :-p

thisisnotaspoon,

Long time since I worked in Aberdeen so I'm not up on the day rates, I'm going back many years but the whole place made me turn my back on it & stay over seas.

In this case what the shareholders say is irrelevant. According to the lady on Radio 4 this morning this is a retrospective vote and the company is under no obligation to change anything or take any notice of the vote and its outcome. The best they can hope is to put some pressure on the company to choose to change it. More to the point the majority of shareholders will approve the award

As someone from Aberdeen who doesn't work in the oil industry my heart bleeds. Boo f@@king hoo.

They've all been paid far far too much for what they do, particularly the desk bound paper shufflers. All its done is screw up the local economy & drive up house prices.

Long time since I worked in Aberdeen so I'm not up on the day rates, I'm going back many years but the whole place made me turn my back on it & stay over seas.

Never been to Aberdeen, but I'd be surprised if the day rates for engineers weren't higher than that at their peak, £60/hour would have been an average mid-career engineer in the SE, I'd expect Aberdeen to be higher.

They've all been paid far far too much for what they do, particularly the desk bound paper shufflers. All its done is screw up the local economy & drive up house prices.

Why the vitriol for desk bound paper shufflers?

Working in engineering design is an entirely paper (well, computerized since the 80's anyway) exercise.

Mate of mine who I haven't seen for years works(ed) in the oil & gas industry as a project manager in Norway.
Last time I spoke to him (which was probably 7 or 8 yrs ago) he'd recently signed up to a new contract & asked for £99/hr which they paid him without batting an eyelid. He was annoyed he hadn't asked for more.
And part of the package included moving his family with him, paying for an apartment & 2 cars for him and I think he was fully expensed too, so was barely spending any of his own earnings....

Envious....? Me?! I could have upgraded from SLX to XT!!

Does someone who's been made redundant from a steel mill on 30k deserve more sympathy than someone who's been made redundant form the O&D sector on 60k? I don't think it any different tbh however one would hope the person earning 60k would make some provision.

The shareholders have rejected it apparently.

EDIT: Non-binding vote against it.

chrismac - Member 
In this case what the shareholders say is irrelevant.....[links somehow to]....More to the point the majority of shareholders will approve the award

The shareholders own the company....

they approve the award......(or not, or agree a three year binding formula, or sit in the backsides mute?)

and the problem is?

Dahedd, wee eck used to spin a very different story about the industry's impact on the Scottish (it's our oil don't you know) and local economy. Was he talking BS?

US CEO's earn considerably more, £100m+ not uncommon so the amount is relatively modest on a global scale.

Totally irrelevant!

By the same logic, GBH shouldn't be a crime as some people commit Murder, which is far worse....

[quote=binners spake unto the masses, saying]If the minimum wage was £20 an hour, our dreadful productivity record would have resulted in significantly higher unemployment. You chose....

Yet the boardroom occupants, with their enormous annual increases, who've overseen this collapse in this countries competitiveness, and dire productivity record, deserve their huge annual salary increases and massive bonuses because.....?
Just because....

Because football (TM)THM

There is no justification for the pay gap between the BP boss and other colleagues within the organisation at other levels

Also, no one even needs that level of income....it's pure greed, made even more obscene considering all the poverty we have in the world.

How can a ratio work when the lowest paid BP worker will almost certainly work in a different country, for example Nigeria ?

@Northwind fair to say many of the best execs will be working abroad and/or for US companies

@eden talk to the footballers, they play for the love of the game right ?

@jambayla...two wrongs don't make a right...

teamhurtmore - Member
If the minimum wage was £20 an hour, our dreadful productivity record would have resulted in significantly higher unemployment. You chose....

Are the hotshot directors on 6 or 7 figure salaries not paid these sums to help improve productivity?

Among other things, yes.

Also at that level the CEO's themselves are taking a big risk - They're only one decision away from the sack