BP 2014 Annual Report Download - page 80

Base salary
The annual base salaries of the executive directors were reviewed in May
2014. In conducting this review the committee considered all of the factors
required by the policy and the overall level of increases for employees in
both the UK and the US. They also considered the distribution and average
level of increases for group leaders comprising around 500 executives in
the group. This averaged 3.1%. Based on this review, salaries were
increased by 3% on average, resulting in salaries of $1,854,000 for Bob
Dudley, £731,500 for Dr Brian Gilvary and £797,000 for Iain Conn. These
increases took effect on 1 July 2014.
Total remuneration in more depth
In describing the work and decisions of the committee in 2014, the
summary wording of the approved policy has been used to introduce the
committee’s approach to each element of remuneration. Throughout this
report, the word policy refers to the directors’ remuneration policy
2015 implementation
The committee determined that in future years, salaries would be
reviewed in January to be effective in April, consistent with the rest
of BP’s employees. No increases were granted for 2015, in line with the
group-wide salary freeze.
Benefits
Executive directors received car-related benefits, security assistance,
insurance and medical benefits.
Annual bonus
Provides a variable level of remuneration dependent on short-term performance against the annual plan.
Policy summary
Operation and opportunity
 
reflects BP’s strategy.
 
 
nature of the measure in question.
Performance framework
 
 
recordable injury frequency and tier 1 process safety events.
 pal measures of annual bonus will be based on value creation and may include financial measures such as operating cash flow,
replacement cost operating profit and cost management, as well as operating measures such as major project delivery, downstream net income
per barrel and upstream unplanned deferrals. The specific metrics chosen each year will be set out and explained in the annual report on
remuneration.
Framework
The committee determined performance measures and their weightings
for the 2014 annual bonus at the beginning of the performance year,
focusing on two key priorities: safety and value.
Performance measures remained largely unchanged from last year in order
to maintain continuity and build momentum for delivery of the 10-point
plan. Measures and targets reflected the business plan for the year and
were set so that meeting plan would result in an on target bonus reward.
Bob Dudley and Dr Brian Gilvary’s annual bonus was based 100% on
group annual bonus objectives.
Safety made up 30% of group annual bonus objectives. Safety measures
related to loss of primary containment, tier 1 process safety events and
recordable injury frequency. Challenging targets for these measures were
set, both to build on the improving trend of the last three years and to
continue to reduce the number of safety events.
Value made up 70% of group annual bonus objectives. Measures included
delivering operating cash flow in line with the 10-point plan; increasing
underlying replacement cost profit; reducing corporate and functional
costs; improving operating efficiency in upstream operations by minimizing
unplanned deferrals; completing major projects planned within the year;
and delivering downstream profit per barrel of refining capacity.
Iain Conn’s annual bonus was based 70% against the group annual bonus
objectives and 30% against safety, operating efficiency and profitability
performance of the downstream segment.
approved by shareholders at the company’s annual general meeting on 10
April 2014. BP’s strategy is reflected in the measures adopted by the
committee for the executive directors and further aligned with those for
the senior leadership of the group. The policy is available at
bp.com/remuneration and is set out in the BP Annual Report and
Form 20-F 2013.
Salary and benefits
Provides base-level fixed remuneration to reflect the scale and dynamics of the business, and to be competitive with the external market.
Policy summary
Operation and opportunity
 
 
Internally, increases for the group leaders as well as employees in relevant countries are considered.
 
 
Performance framework
 
salary increase and exceptional sustained contribution may be grounds for accelerated salary increases.
BP Annual Report and Form 20-F 201476