BP’s chief executive, Murray Auchincloss, saw his pay drop by 30% last year, bringing his total earnings down to £5.36 million. This reduction comes as the oil giant fell short of key profit and operational goals.
While Auchincloss’s base salary remained steady at £1.45 million for 2024, his share awards decreased sharply from £4.36 million to £2.75 million due to missed targets related to earnings, cash flow, reliability, and energy transition.
Recently, BP abandoned its five-year strategy aimed at becoming a leader in green energy. Instead, Auchincloss announced a shift back to focusing on oil and gas, with plans to sell off $20 billion in assets over the next two years. Additionally, the company has reduced its renewable energy spending by 70% as part of this strategic reset, and it will no longer include energy transition targets in bonus calculations for this year.
BP is facing pressure from activist investor Elliott Management, which now holds nearly 5% of the company and is pushing for significant changes to address years of underperformance.
In its latest annual report, BP indicated that it has hired Independent Board Evaluation, a consulting firm, to conduct its board performance review, which was previously handled internally. As a result of the review, the company plans to address succession planning for its board and senior management. Helge Lund, BP’s chair, emphasized the need for a culture of accountability regarding performance and capital allocation.
Furthermore, BP is actively seeking new board members with experience in industrial companies, expanding its search beyond its usual sector. Recently, Ian Tyler, the former CEO of Balfour Beatty and a senior independent director at Anglo American, was appointed to chair its remuneration committee, pending shareholder approval.
Controversially, Auchincloss’s pay for 2024 is expected to be significantly lower than that of Shell’s CEO, Wael Sawan, who earned nearly £8 million in 2023. Meanwhile, Lund, who has received criticism for the previously failed strategy, saw his salary increase by 4.4% to £845,000, keeping his overall package relatively unchanged at around £882,000.