BP 2008 Annual Report Download - page 88

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BP Annual Report and Accounts 2008
Directors’ remuneration report
Remuneration of non-executive directors in 2008a
£ thousand
2007 2008
A Burgmans 86 90
Sir William Castell 87 108
C B Carroll 43 93
G Davidb n/a 100
E B Davis, Jr 107 105
D J Flint 86 90
Dr D S Julius 106 110
Sir Tom McKillop 87 95
Sir Ian Prosser 137 170
P D Sutherland 517 600
Director leaving the board in 2008
Dr W E Masseyc 133 90
aThis information has been subject to audit.
bAppointed on 11 February 2008.
cAlso received a superannuation gratuity of £23,000.
No share or share option awards were made to any non-executive
director in respect of service on the board during 2008.
Non-executive directors have letters of appointment, which
recognize that, subject to the Articles of Association, their service is at the
discretion of shareholders. All directors stand for re-election at each AGM.
Review of chairman and non-executive director remuneration
The new process for the determination of non-executive remuneration,
as described earlier, was operated during the year and recommendations
were made. However, the chairman and the non-executive directors
informed the board that, in the current economic circumstances, they
did not wish to receive any increase in remuneration for the coming
year 2009.
The board, therefore, decided after review to maintain fees for
2009 at the 2008 level set out in the fee structure table, save that the
committee membership fee would no longer be paid to members of
the nomination committee.
Superannuation gratuities
Until 2002, BP maintained a long-standing practice whereby non-
executive directors who retired from the board after at least six years’
service were eligible for consideration for a superannuation gratuity.
The board was, and continues to be, authorized to make such payments
under the company’s Articles of Association and the amount of the
payment is determined at the board’s discretion, having regard to the
director’s period of service as a director and other relevant factors.
In 2002, the board revised its policy with respect to
superannuation gratuities so that:
• Non-executive directors appointed to the board after 1 July 2002
would not be eligible for consideration for such a payment.
• While non-executive directors in service at 1 July 2002 would remain
eligible for consideration for a payment, service after that date would
not be taken into account by the board in considering the amount of
any such payment.
The board made a superannuation gratuity of £23,000 during the year to
Dr Walter Massey, who retired in April 2008. This payment was in line
with the policy arrangements agreed in 2002 and outlined above.
Non-executive directors of Amoco Corporation
Non-executive directors who were formerly non-executive directors of
Amoco Corporation have residual entitlements under the Amoco Non-
Employee Directors’ Restricted Stock Plan. Directors were allocated
restricted stock in remuneration for their service on the board of Amoco
Corporation prior to its merger with BP in 1998. On merger, interests in
Amoco shares in the plan were converted into interests in BP ADSs. The
restricted stock will vest on the retirement of the non-executive director
at the age of 70 (or earlier at the discretion of the board). Since the
merger, no further entitlements have accrued to any director under the
plan. The residual interests, as interests in a long-term incentive scheme,
are set out in the table below, in accordance with the Directors’
Remuneration Report Regulations 2002.
Interest in BP ADSs Date on
at 1 Jan 2008 and which director
31 Dec 2008a reaches age 70b
E B Davis, Jr 4,490 5 Aug 2014
Director leaving the board in 2008
Dr W E Masseyc 3,346 5 April 2008
aNo awards were granted and no awards lapsed during the year. The awards were granted over
Amoco stock prior to the merger but their notional weighted average market value at the date of
grant (applying the subsequent merger ratio of 0.66167 of a BP ADS for every Amoco share) was
$27.87 per BP ADS.
bFor the purposes of the regulations, the date on which the director retires from the board at or
after the age of 70 is the end of the qualifying period. If the director retires prior to this date, the
board may waive the restrictions.
cDr Massey retired from the board on 17 April 2008. He had received awards of Amoco shares
under the plan between 22 June 1993 and 28 April 1998 prior to the merger. These interests had
been converted into BP ADSs at the time of the merger. In accordance with the terms of the
plan, the board exercised its discretion over this award on 16 May 2008 and the shares vested on
that date (when the BP ADS market price was $74.57) without payment by him.
Past directors
Mr Miles (who was a non-executive director of BP until April 2006) was
appointed as a director and non-executive chairman of BP Pension
Trustees Limited in October 2006 for a term of three years. During 2008,
he received £150,000 for this role.
Dr Walter Massey (who retired as a non-executive director of BP
in April 2008) remained a member of the nomination committee during
the year to assist in the search for a successor to BP’s chairman.
Dr Massey received a total fee of £15,000 for this role in 2008.
Dr Massey was also appointed to the BP America board in April 2008 for
a term of two years. During 2008, he received US$93,500 for this role.
This directors’ remuneration report was approved by the board and
signed on its behalf by David J Jackson, company secretary, on
24 February 2009.
Directors remuneration report
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