BP 2015 Annual Report Download - page 92

Remuneration policy table
This is a summary of the remuneration policy as set out in the 2014 directors’ remuneration report and approved by shareholders.
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.
• 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.
Reinforces the long-term nature of the business and the
importance of sustainability, linking a further part of remuneration
to equity.
• 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.
Pension
Recognizes competitive practice in home country.
• 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.
Ties the largest part of remuneration to long-term performance. The level
varies according to performance relative to measures linked directly to
strategic priorities.
Performance shares • Shares up to a maximum value of five 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.
Salary and benefits
Deferred bonus
Provides a variable level of remuneration dependent on short-term
performance against the annual plan.
• 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.
Annual bonus
BP Annual Report and Form 20-F 201588