BP 2013 Annual Report Download - page 111

Corporate governance
BP Annual Report and Form 20-F 2013 107
This section of the directors’ remuneration report describes the separate
policies of the BP board for the remuneration of the chairman and the
non-executive directors (NEDs).
Key principles
The principles which underpin the board’s policies for the remuneration of
the chairman and the NEDs are as follows:
• Remuneration should be sufficient to attract, motivate and retain
world-class non-executive talent.
• Remuneration practice should be consistent with recognized best
practice standards for chairman and NED remuneration.
• The aggregate annual remuneration payable to the chairman and NEDs
is determined by shareholder resolution in accordance with the
company’s Articles of Association. The aggregate limit will be increased
Board remuneration policy for the chairman
The chairman is non-executive and, in accordance with the Governance
Code, independent on appointment. The quantum and structure of the
chairman’s remuneration is set by the board based upon a recommendation
from the remuneration committee. The chairman is not involved in setting
his own remuneration.
This policy reflects the approach adopted by the board over the years and
which has previously been described to shareholders.
Element and purpose Operation and opportunity
The quantum and structure of chairman’s remuneration is reviewed
annually by the remuneration committee, which makes a
recommendation to the board.
The chairman is provided with an office and full time secretarial and
administrative support in London and a contribution to an office and
secretarial support in Sweden. A chauffeured car is provided in London,
together with security assistance. All reasonable travelling and other
expenses (including any relevant tax) incurred in carrying out his duties is
reimbursed.
The maximum remuneration for non-executive directors is set in accordance with the Articles of Association.
to £5 million if resolution 20 at the 2014 AGM is duly passed.
• NEDs should not receive share options, bonuses or retirement benefits
from the company.
• NEDs are encouraged to establish a holding in BP shares of the
equivalent value of one year’s base fee.
NEDs are supported through the company secretary’s office. This support
includes assistance with travel and transport, security advice (when
needed) and administrative services.
NEDs have letters of appointment that 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.
Basic fee – chairman
Remuneration is in the form of cash fees, payable monthly.
Remuneration practice is consistent with recognized best
practice standards for a chairman’s remuneration and as a
UK-listed company, the quantum and structure of the
chairman’s remuneration will primarily be compared against
best UK practice.
Benefits and expenses
The chairman is provided with support and reasonable
travelling expenses.
(b) Non-executive directors