BP chief executive’s pay triples in 2013

Mixture of salary, bonus and share awards for Bob Dudley worth $8.7m ( 5.2m) in 2013, compared with $2.6m for the previous year

The pay of Bob Dudley, BP’s chief executive, tripled last year despite the legal threats still hanging over the company from the Deepwater Horizon disaster.

The oil boss received $8.7m ( 5.2m) in salary, bonus and share awards last year, according to the company’s annual report, compared with $2.6m in 2012.

When contributions to his pension were included, Dudley, 58, got $13.2m for 2013 and has already accumulated a retirement package worth $2m a year.

The American took over at BP towards the end of 2010 after the exit of Tony Hayward, who led the group during the disastrous blowout in the Gulf of Mexico.

BP has already paid out billions in compensation for the worst environmental accident in US history and could yet be found guilty of gross negligence by the US department of justice, which could bring penalties of up to $20bn. It has also failed in court to stop what it believes are “absurd” compensation payments to victims who do not need to prove financial loss from the spill.

The share price has recovered from the immediate aftermath of spill but, at 486p, it is still far below the 650p it had reached just before the disaster in 2010.

The company is also facing potential difficulties after taking a 20% stake in Russia’s largely state-owned oil group, Rosneft last year, given the threat of sanctions against Moscow over the Crimea crisis.

But the company said Dudley had taken steps to re-establish a good financial and safety record since he had been in charge.

“BP has made strong progress over the past three years under Bob Dudley’s leadership – particularly in areas such as safety, operations and building for the future through reserve replacement – and his remuneration reflects this,” said a BP spokesman. “The great majority of his potential pay is directly dependent on BP’s performance in areas essential both to the delivery of the company’s strategy and to the long-term interests of its shareholders.”

City analysts have praised Dudley in recent times for putting more emphasis on the interests of investors with a focus on dividends and share buybacks.

“Others tell this story but we suspect BP ‘gets it’ (the need to maximise returns for investors) more than most, given its travails in recent years,” said Investec Securities in an equity note this week. But the oil and gas analyst Neil Morton retains a “hold” recommendation on the BP shares and a target price of 460p per share.

Dudley has already disposed of around $40bn of assets and in October BP said that it expected to sell off a further $10bn of assets by the end of 2015, with the proceeds largely used to fund share buybacks.

The new BP prides itself on being smaller and more streamlined with a decision earlier this week to hive off its onshore oil and gas assets in the US into a separate business to be run autonomously. Dudley has not ruled out a separate stock listing for this operation at some point.

The increase in Dudley’s pay during 2013 was accentuated by a relatively lower level for him during 2012 when the company’s difficulties were deemed that much more profound. The 5.2m figure compares with his head of downstream operations, Iain Conn who received 3.4m, up from 1.8m in 2012, while finance director Brian Gilvery received 2.1m last year compared to 1.4m in 2012.

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