BP 2009 Annual Report Download - page 92

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BP Annual Report and Accounts 2009
Directors’ remuneration report
a
Service contracts
Director
Contract Salary as at
date 31 Dec 2009
Dr A B Hayward 29 Jan 2003 £1,045,000
I C Conn 22 Jul 2004 £690,000
Mr R Dudley 6 Apr 2009 $1,000,000
Dr B E Grote 7 Aug 2000 $1,380,000
A G Inglis 1 Feb 2007 £690,000
Service contracts have a notice period of one year and may be
terminated by the company at any time with immediate effect on
payment in lieu of notice equivalent to one year’s salary or the amount of
salary that would have been paid if the contract had been terminated on
the expiry of the remainder of the notice period. The service contracts are
expressed to expire at a normal retirement age of 60 (subject to age
discrimination).
Dr Grote’s contract is with BP Exploration (Alaska) Inc. He is
seconded to BP p.l.c. under a secondment agreement of 7 August 2000,
which expires at the date of the 2011 Annual General Meeting.
Mr Dudley’s contract is with BP Corporation North America Inc. He is
seconded to BP p.l.c. under a secondment agreement of 15 April 2009
which expires on 15 April 2012. Both secondments can be terminated by
one month’s notice by either party and terminate automatically on the
termination of their service contracts.
There are no other provisions for compensation payable on early
termination of the above contracts. In the event of the early termination
of any of the contracts by the company, other than for cause (or under a
specific termination payment provision), the relevant director’s then
current salary and benefits would be taken into account in calculating any
liability of the company.
All service contracts include a provision to allow for severance
payments to be phased, when appropriate. The committee will also
consider mitigation to reduce compensation to a departing director, when
appropriate to do so.
Executive directors – external appointments
The board encourages executive directors to broaden their knowledge
and experience by taking up appointments outside the company. Each
executive director is permitted to accept one non-executive appointment,
from which they may retain any fee. External appointments are subject
to agreement by the chairman and reported to the board. Any external
appointment must not conflict with a director’s duties and commitments
to BP.
During the year, the fees received by executive directors for external
appointments were as follows:
Executive director
Additional position
Appointee held at appointee Total
company company fees
Dr A B Hayward Tata SteelaSenior £29,000
Independent
Director
I C Conn Rolls-Royce Senior £65,000
Independent
Director
Dr B E Grote Unilever Audit committee Unilever PLC
member £36,000
Unilever NV
Z52,250
A G Inglis BAE Chair of £90,000
Systems Corporate
Responsibility
Committee
Member of Tata Steel Europe board until 1 April 2009 and Tata Steel Ltd board until
18 September 2009.
Remuneration committee
All the members of the committee are independent non-executive
directors. Throughout the year, Dr Julius (chairman), and Sir Ian Prosser
were members. Mr Davis and Sir Tom McKillop served on the committee
until April 2009 and were succeeded by Mr Burgmans and Mr David in
May 2009. The group chief executive was consulted on matters relating
to the other executive directors who report to him and on matters
relating to the performance of the company; neither he nor the chairman
were present when matters affecting their own remuneration were
discussed.
The remuneration committee’s tasks, as set out in the board governance
principles, are:
• To determine, on behalf of the board, the terms of engagement and
remuneration of the group chief executive and the executive directors
and to report on these to the shareholders.
• To determine, on behalf of the board, matters of policy over which the
company has authority regarding the establishment or operation of
the company’s pension scheme of which the executive directors are
members.
• To nominate, on behalf of the board, any trustees (or directors of
corporate trustees) of the scheme.
• To review the policies being applied by the group chief executive in
remunerating senior executives other than executive directors to
ensure alignment and proportionality.
• To recommend to the board the quantum and structure of
remuneration for the chairman.