BP 2011 Annual Report Download - page 153

Directors’ remuneration report
Directors’ remuneration report
BP Annual Report and Form 20-F 2011 151
Non-executive directors’
remuneration
Policy
The board sets the level of remuneration for all non-executive directors
within a limit approved from time to time by shareholders. Key elements of
BP’s policy on non-executive director remuneration include:
• Remuneration should be sufficient to attract, motivate and retain
world-class non-executive talent.
• Remuneration of non-executive directors is proposed by the chairman
of the board and agreed by the board and should be proportional to their
contribution towards the interests of the company.
• Remuneration practice should be consistent with recognized best
practice standards for non-executive directors’ remuneration.
• Remuneration should be in the form of cash fees, payable monthly.
• Non-executive directors should not receive share options from the
company.
• Non-executive directors are encouraged to establish a holding in BP
shares of the equivalent value of one-year’s base fee.
Process
BP reviews the quantum and structure of chairman of the board and
non-executive remuneration on an annual basis. The chairman’s
remuneration is reviewed by the remuneration committee, who makes a
recommendation to the board; the chairman does not vote on his own
remuneration. Non-executive director remuneration is reviewed by the
chairman, who makes a recommendation to the board; non-executive
directors do not vote on their own remuneration.
Following the 2011 review of non-executive remuneration, it was
concluded that in light of wider economic circumstances, an increase
would not be appropriate and therefore no adjustment would be made to
fee levels. It was agreed that the policy of annual review would continue
and that the transatlantic attendance allowance be renamed the
intercontinental travel allowance to better reflect when the allowance
is awarded.
Fee structure
The table below shows the current fee structure for non-executive
directors on 1 January 2012:
£ thousand
Fee level
Chairmana750
Senior independent directorb120
Board member 75
Audit, Gulf of Mexico and safety, ethics and environment
assurance committees chairmanship feesc30
Remuneration committee chairmanship feec20
Committee membership feed5
Intercontinental travel allowance 5
a
The chairman remains ineligible for committee chairmanship and membership fees or
intercontinental attendance allowance. He has the use of a fully maintained office for company
business, a chauffeured car and security advice in London. He receives secretarial support as
appropriate to his needs in Sweden.
b The senior independent director is still eligible for committee chairmanship fees and
intercontinental attendance allowance plus any committee membership fees.
c Committee chairmen do not receive an additional membership fee for the committee they chair.
d For members of the audit, Gulf of Mexico, SEEAC and remuneration committees.
Remuneration of non-executive directors in 2011 (audited)
£ thousand
2011 2010
C-H Svanberg 750 750
P M Anderson 128 118
F L Bowman 120 17
A Burgmans 100 90
C B Carroll 85 90
Sir William Castell 168 147
G David 128a135
I E L Davis 160 69
B R Nelson 103 17
F P Nhlekob–
113
Directors leaving the board in 2011
D J Flint 35 108
Dr D S Julius 32c100
a In addition, George David received a £28,000 fee for chairing the BP technical advisory council.
b Appointed on 1 February 2011.
c This figure excludes a superannuation gratuity of £1,543.
While fees were held at 2010 levels, in 2011 actual fees paid to
non-executive directors were affected by changes in chairmanship and
committee membership and the number of intercontinental meetings for
which an attendance allowance was paid.
No share or share option awards were made to any non-executive
director in respect of service on the board during 2011.
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.
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, taking into consideration the director’s period of service
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.
Dr DeAnne Julius who retired on 14 April 2011 was paid a superannuation
gratuity of £1,543, in line with the policy arrangements agreed in 2002 and
outlined above. With the retirement of Dr Julius from the board, no other
non-executive directors are eligible for superannuation gratuities.
Past directors
Sir Ian Prosser (who retired as a non-executive director of BP in April 2010)
was appointed as a director and non-executive chairman of BP Pension
Trustees Limited on 29 September 2010. During 2011, he received
£100,000 for this role.
Peter Sutherland (who was chairman of BP until 31 December
2009) continued his membership of the BP international advisory board
after his retirement from the board of BP p.l.c. During 2011, he received
e100,000 for this role.
This directors’ remuneration report was approved by the board and signed
on its behalf by David J Jackson, Company Secretary on 6 March 2012.