This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

BP Annual General Meeting Report

With the AGM season now in full swing, it’s worth pointing out that ShareSoc makes available many useful reports on such meetings. These are available to all ShareSoc subscribing members in an archive here. Below is an abbreviated sample of one by ShareSoc Chairman Stan Grierson on last weeks meeting of BP.


As always BP’s AGM is both the first and one of the biggest of the season, and took place at the ExCel Centre on Thursday 10th April. The large hall was well filled. The meeting started on time at 11:30 am and finished at about 2 pm.

Opening remarks from the chairman Carl-Henric Svanberg and the CEO Bob Dudley gave a positive view of the company and they started taking questions in the order of items on the voting paper, which had approval of the Remuneration Report as Resolution number 2. This quickly combined with the Directors’ Remuneration Policy (Resolution 3), and later Resolutions on the Executive Directors’ Incentive Plan and Non-Executives remuneration ceiling. Several investors had obviously spent a great deal of time on the Annual report, very necessary on a masterpiece of obfuscation weighing in at 900 grams or exactly 2 lbs, and many questions were discussed on this.

I was there in my own capacity as a shareholder and was also representing the German nation with nearly two million shares, under the Eurovote system whereby shareholders in other countries can have their shares voted by the shareholders group in the country of registration. Other countries do not have the same ease of proxy voting that we enjoy.

Apart from my own research Germany had sent an excellent set of notes which matched and improved my own work, and on the work of other investors present. The chairman and the CEO stonewalled most of the questions as they have always done, clearly not accepting the point that the board’s remuneration was at an obscenely high level for a company with an unexceptional record. For example in dealing with Russia, both in regard to TNK-BP and to Rosneft in which BP now has a 19.75% stake, which may be at risk from either or both presidents. We know how much Obama likes Britain, and especially BP. Also there was the Deepwater Horizon disaster in the Gulf of Mexico, which is certainly not yet fully resolved as yet.

Among the matters of contention were the proposal that directors’ variable remuneration could be as high as 900% of base salary. Some people during this year had earned 780% of basic salary. We were asked to approve the Executive Directors Incentive Plan with the potential of achieving 925% in aggregate. By the way – no clawback provisions in evidence.

Many investors condemned BP over share buybacks, which the report had listed with dividends under “Distributions to shareholders”, a section which had the dividends as $6,911 million, and the buybacks as $5,463 million. I asked the chairman how the shareholders could spend the $5,463m to boost the economy. No answer. I pointed out that a mere $3 billion added to the dividend would have brought it back to the 2008-9 level, and he would still have been able to waste $3 billion on buybacks, and would have been a hero. No reply but much support from the audience.

Among their great successes listed for the year was the increase in wind generation capacity of 1,590 MW. In a later, small paragraph it is stated that they were trying to sell this venture. I asked Dudley why he was quoting total capacity when the achieved figure with the UK’s 3400 land turbines was about 21% (admitted). He replied that they had not had a satisfactory bid, but had found (probably by magic) that this was a satisfactory investment and they were keeping it. He said that their turbines were achieving about 91% efficiency. He then suggested that I did not believe him. He was right, accepting that his wind farms are in the USA. They must have anticyclones there too.

All in all a difficult meeting with most of the attendees concerned about the totally unreasonable remuneration of the directors, many of whose  bonuses come from share packages which supply large dividends and which are not counted in their declared incomes.

All the resolutions were passed. Note though that there were 16.1% of votes against the Remuneration Report (1,518 million), plus another 2,218 million votes withheld. There were also 3.6% of votes against the Remuneration Policy.

We had already been warned by PIRC of the BP Remuneration Report and they urged shareholders to vote against AGM resolutions there. I also comment on the speaker from Standard Life who spoke well against the remuneration policy and other items. I think he was the only speaker from a major institution, and deserves credit for that, as does the German shareholders group DSW, for their work on the Annual Report .

Stan Grierson

Note: go here to become a subscriber to ShareSoc and gain access to all our AGM reports: Membership Options

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.