BP 2015 Annual Report Download - page 87

Corporate governance
Remuneration committee
Members
Professor Dame Ann
Dowling (chair)
Member since July 2012; committee chair
since May 2015
Antony Burgmans Member since May 2009; committee chair
from May 2011 to May 2015
Alan Boeckmann Member since May 2015
George David Member from May 2009 to April 2015
Ian Davis Member since July 2010
Andrew Shilston Member since May 2015
2015 was a year of transition for the committee as the membership
evolved. Dame Ann Dowling took the chair from Antony Burgmans after
the May meeting. George David stood down from the board in April, Alan
Boeckmann and Andrew Shilston joined the committee.
Carl-Henric Svanberg and Bob Dudley attend meetings of the committee
except for matters relating to their own remuneration. The group chief
executive (GCE) is consulted on the remuneration of the other executive
director and the executive team and on matters relating to the performance
of the group. The group human resources director normally attends
meetings of the committee, and other executives may attend relevant parts
of those meetings. The committee consults other relevant committees of
the board, for example the SEEAC, on issues relating to the exercise of its
judgement or discretion.
Key tasks of the remuneration committee
• Determine the policy for the chairman and the executive directors (the
policy) for inclusion in the remuneration policy for all directors as required
by the regulations.
• Review and determine as appropriate the terms of engagement,
remuneration and termination of employment of the chairman and the
executive directors in accordance with the policy, and be responsible for
compliance with all remuneration issues relating to the chairman and the
executive directors required by the regulations.
• Prepare for the board an annual report to shareholders on the
implementation of the policy, so far as it relates to the chairman and the
executive directors, as required by the regulations.
• Approve the principles of any equity plan for which shareholder approval
is to be sought.
• Approve the terms of the remuneration (including pension and
termination arrangements) of the executive team as proposed by the
GCE.
• Approve changes to the design of remuneration as proposed by the
GCE, for the group leaders of the company.
• Monitor implementation of remuneration for group leaders to ensure
alignment and proportionality.
• Engage such independent consultants or other advisers as the
committee may from time to time deem necessary, at the expense of
the company.
In these tasks, regulations means regulations made from time to time
under the Companies Act 2006, the UK Corporate Governance Code
adopted by the Financial Reporting Council and the UK Listing Authority’s
Listing Rules in relation to the remuneration of directors of quoted
companies.
Activities during the year
During the year, the committee met five times. Key discussions and
decision items are shown in the table below.
Remuneration committee 2015 meetings
Jan May Jul Sept Dec
Strategy and policy
Review and approve directors’ remuneration
report (DRR) for 2015 AGM
Consider DRR votes from 2015 AGM
Review committee tasks and operation
Review of BP remuneration strategy
Salary review
Executive directors
Executive team and leadership group
Annual bonus
Assess performance
Determine bonus for 2014
Agree measures and targets for 2015
Review measures for 2016
Consider measures and targets for 2016
Long-term equity plan
Assess performance
Determine vesting of 2012-2014 plan
Determine vesting of 2011 deferred bonus
Agree measures, targets and awards
for 2015-2017 plan
Review measures for 2016-2018 plan
Consider measures and targets
for 2016-2018 plan
Other items
Review principles for target setting
and disclosure
Other issues as required
Independence and advice
Independence
The board considers all committee members to be independent with no
personal financial interest, other than as shareholders, in the committee’s
decisions.
Advice
During 2015 David Jackson, the company secretary, who is employed by
the company and reports to the chairman of the board, acted as secretary
to the remuneration committee. The company secretary periodically
reviews the independence of the committee’s advisers.
Gerrit Aronson, an independent consultant, is the committee’s
independent adviser with experience of advising a number of companies in
the UK and Europe. He is engaged directly by the committee. Advice and
services on particular remuneration matters were also received from other
external advisers appointed by the committee.
Willis Towers Watson provided information on the global remuneration
market, principally for benchmarking purposes. Freshfields Bruckhaus
Deringer LLP provided legal advice on specific compliance matters to the
committee. Both firms provide other advice in their respective areas to the
group.
Total fees or other charges (based on an hourly rate) paid in 2015 to the
above advisers for the provision of remuneration advice to the committee
as set out above (save in respect of legal advice) are as follows:
Gerrit Aronson £130,000
Willis Towers Watson £38,309
BP Annual Report and Form 20-F 2015 83