7th Mar 2014 12:03
LONDON (Alliance News) - BP PLC Chief Executive Bob Dudley in 2013 was paid more than triple the amount he was paid in 2012, despite continuing legal threats over the Deepwater Horizon oil spill.
The major oil and gas company said in its remuneration report that Dudley was paid USD8.7 million in 2013 through a mixture of salary, bonus and share awards, compared with USD2.6 million the previous year.
Including contributions to his pension, Dudley, who took over from Tony Hayward in 2010 amid the fallout of the worst offshore oil disaster in US history, was paid USD13.2 million for 2013.
In April 2010, the deep-water horizon blow out and subsequent oil spill in the Gulf of Mexico killed 11 people and released millions of barrels of oil into the sea.
On Monday, BP was told by a federal appeals court that it must abide by the terms of a USD9.2 billion settlement with business-loss claimants of the oil spill, and the court rejected claims by BP that the administrator is misinterpreting the financial ramifications of the spill.
BP had managed to halt payments in December, arguing that certain companies making claims were not directly affected by the oil spill.
The company said in February that the cumulative pretax charge for the Gulf of Mexico oil spill was USD42.7 billion at the end of 2013, and if it is found guilty of gross negligence by the US department of justice in another upcoming case, the company could have to pay a further USD20 billion.
There are also worries over the company's 20% stake in Rosneft OAO, which is majority owned by the Russian state, after Western powers threatened possible sanctions against Moscow in retaliation for the ongoing crisis in Crimea.
BP's pretax profit increased to USD31.77 billion in 2013, from USD19.77 billion in 2012, and the company announced a quarterly dividend of 9.5 cents per ordinary share, or USD0.57 per ADS, which is expected to be paid on March.
BP also announced in October 2013, that it expects to divest a further USD10 billion of its underperforming assets by 2015 and use the proceeds for additional distributions, with a bias to share buybacks.
Some analysts have praised Dudley's strategy recently. UBS said in a research note Friday that the company's new slimmed down and simpler structure will help the company in the long run, while Deutsche Bank said Wednesday that the company's recent focus on dividends and share buybacks gives its investors comfort despite the litigation risk.
The company said in its remuneration report that Dudley has moved the company towards a better financial and safety record since he took charge and the majority of his pay is dependant on BP's performance in areas essential to the financial standing of the company and its shareholders interests. He received his positive pension contributions due to being at the company for three years, it said.
"The increased value reported for Bob Dudley reflects his promotion to group chief executive in 2010 which, because his defined benefit pension is based on three-year average remuneration, takes a number of years to reach a steady state," the company said in a statement.
The company also said its Head of Downstream Operations, Iain Conn, received GBP3.4 million for 2013, an 89% increase on 2012, and its Finance Director Brian Gilvery received GBP2.1 million, a 50% increase on GBP1.4 million the previous year.
The company's share price has rebounded from the immediate aftermath of the Deep Sea Horizon Oil Spill but remains far below the 650 pence it reached just before the accident.
BP shares were down 0.4% to 485.00 pence Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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