BP 2006 Annual Report Download - page 222

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11 Share-based payments continued
The group used a Monte Carlo simulation to fair value the SHRAM element of the 2004 LTPP and EDIP plan. In accordance with the rules of the plan,
the model simulates BP’s SHRAM and compares it with the comparator companies (all companies in the FTSE All World Oil & Gas Index) over the
three-year period of the plan. The SHRAMs of the comparator companies have been determined from market data over the preceding three-year period.
The model takes into account the historic dividend yields, share price volatilities and covariances of BP and each comparator company to produce a
predicted distribution of relative share performance. This is applied to the reward criteria to give an expected value of the SHRAM element.
Accounting expense does not necessarily represent the actual value of share-based payments made to recipients which are determined by the
Remuneration Committee according to established criteria.
12 Auditors’ remuneration
Fees payable to the company’s auditors for the audit of the company’s accounts were $15 million (2005 $19 million and 2004 $13 million).
Remuneration receivable by the company’s auditors for the supply of other services to the company is not presented in the parent company accounts
as this information is provided in the group accounts.
13 Directors’ remuneration
Remuneration of directors $ million
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2006 2005 2004
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Total for all directors
Emoluments 14 18 19
Gains made on the exercise of share options 12 –3
Amounts awarded under incentive schemes 14 86
Emoluments
These amounts comprise fees paid to the non-executive chairman and the non-executive directors and, for executive directors, salary and benefits
earned during the relevant financial year, plus bonuses awarded for the year.
Pension contributions
Five executive directors participated in a non-contributory pension scheme established for UK staff by a separate trust fund to which contributions are
made by BP based on actuarial advice. One US executive director participated in the US BP Retirement Accumulation Plan during 2006.
Office facilities for former chairmen and deputy chairmen
It is customary for the company to make available to former chairmen and deputy chairmen who were previously employed executives, the use of
office and basic secretarial facilities following their retirement. The cost involved in doing so is not significant.
Further information
Full details of individual directors’ remuneration are given in the directors’ remuneration report on pages 68-75.