BP 2013 Annual Report Download - page 102

BP Annual Report and Form 20-F 201398
Remuneration policy table
Element and purpose Operation and opportunity
Provides base-level fixed remuneration
to reflect the scale and dynamics of the
business, and to be competitive with the
external market.
See page 100.
• Salariesarenormallysetinthehome
currency of the executive director and
reviewed annually.
• Salarylevelsandtotalremunerationofoil
and other top European multinationals, and
related US corporations, are considered by
the committee. Internally, increases for the
group leaders as well as all employees in
relevant countries are considered.
• Salaryincreaseswill be in line with all
employee increases in the UK and US and
limited to within 2% of average increase for
the group leaders.
• Benetsreecthomecountrynorms.
The current package of benefits will be
maintained, although the taxable value
may fluctuate.
Provides a variable level of remuneration
dependent on short-term performance
against the annual plan.
See page 100.
• Totaloverallbonus(beforeanydeferral)is
based on performance relative to measures
and targets reflected in the annual plan,
which in turn reflects BP’s strategy.
• On-targetbonusis150%ofsalarywith
225% as maximum.
• Achievingannualplanobjectivesequates
to on-target bonus. The level of threshold
payout for minimum performance varies
according to the nature of the measure
in question.
Reinforces the long-term nature of
the business and the importance of
sustainability, linking a further part
of remuneration to equity.
See page 101.
• Athirdoftheannualbonusisrequiredtobe
deferred and up to a further third can be
deferred voluntarily. This deferred bonus is
awarded in shares.
• Deferredsharesarematchedonaone-for-
one basis, and both deferred and matched
shares vest after three years depending on
an assessment by the committee of safety
and environmental sustainability over the
three-year period.
• Wheresharesvest,additionalshares
representing the value of reinvested
dividends are added.
• Beforebeingreleased,allmatchedshares
that vest after the three-year performance
period are subject (after tax) to an additional
three-year retention period.
Pension
Recognizes competitive practice
in home country.
See page 103.
• Executivedirectorsparticipateinthe
company pension schemes that apply in
their home country.
• CurrentUKexecutivedirectorsremainona
defined benefit pension plan and receive a
cash supplement of 35% of salary in lieu of
future service accrual when they exceed the
annual allowance set by legislation.
• CurrentUSexecutivedirectorsparticipatein
transition arrangements related to heritage
plans of Amoco and Arco and normal
defined benefit plans that apply to
executives with an accrual rate of 1.3% of
final earnings (salary plus bonus) for each
year of service.
Ties the largest part of remuneration to
long-term performance. The level varies
according to performance relative to
measures linked directly to strategic
priorities.
See page 102.
Performance shares • Sharesuptoamaximumvalueofveand
a half times salary for the group chief
executive and four times salary for the other
executive directors can be awarded annually.
• Vestingofsharesafterthreeyearsis
dependent on performance relative to
measures and targets reflecting BP’s
strategy.
• Wheresharesvest,additionalshares
representing the value of reinvested
dividends are added.
• Beforebeingreleased,thosesharesthat
vest after the three-year performance period
are subject (after tax) to an additional
three-year retention period.
Note: Further information is set out in the accompanying notes which follow this table.
Salary and benefits
Annual bonus
Deferred bonus