BP 2014 Annual Report Download - page 84

2012-2014 performance shares vesting
Measures Relative total
shareholder
return
Operating
cash flow
Relative
reserves
replacement
ratio Safetya
Rebuilding
trust
Total
Weight at maximum 3 3 . 3% 3 3. 3% 11.1% 11.1% 11.1% 10 0%
Outcome % Nil 33.3% 7.8% 11.1% 8.3% 60.5%
Met
Not met
Group key performance indicator
Plan/target Outperform
peers $30bn Outperform
peers
Improvement
10-15% Improvement
Outcome Fifth $32.8bn Secondb15-62% Met
a
Safety includes loss of primary containment, tier 1 process safety event (defined by API) and recordable injury frequency.
b This represents a preliminary assessment.
2011-2013 final outcomes confirmation
Last year it was reported that the committee had made a preliminary
assessment of second place for the relative RRR in the 2011-2013
performance shares element. In May 2014 the committee reviewed the
results for all comparator companies as published in their reports and
accounts and assessed that BP was in first place relative to other oil majors
and that the full 20% of shares would vest for this performance measure
as opposed to 14% for second place. This resulted in a final vesting of
45.5% from 39.5% for the entire award. This is reflected in the single
figure table on page 75.
2015 implementation
Shares were awarded in February 2015 to the maximum value allowed
under the policy, five-and-a-half-times salary for Bob Dudley and four-times
salary for Dr Brian Gilvary (see table on page 85). These have been
awarded under the performance share element of the EDIP and are
subject to a three-year performance period. Those shares that vest are
subject, after tax, to an additional three-year retention period. The
2015-2017 performance share element will be assessed over three years
based on the following measures: relative TSR (one third); cumulative
operating cash flow (one third); and strategic imperatives (one third)
including relative RRR; S&OR risk assessment; and major project delivery.
The results of this index were benchmarked against external data and were
particularly encouraging.
Recognizing the need to make further progress in this area, the committee
determined that 8.3% of the maximum 11.1% of shares will vest for the
rebuilding trust measure.
As in past years, the committee also considered the overall performance of
the group during the period and whether any other factors should be taken
into account. Following this review, the committee assessed that a
preliminary 60.5% vesting was a fair reflection of the overall performance
pending confirmation of the reserves replacement result. This will result in
the vesting shown in the table.
The vested shares for current executive directors are subject to a further
three-year retention period before they will be released to the individuals in
2018.
2012-2014 performance shares preliminary outcome
Shares
awarded
Shares vested
inc dividends
Value of
vested shares
Bob Dudley 1,343,712 941,286 $6,391,332
Dr Brian Gilvary 624,434 445,912 £1,904,044
Iain Conn 660,633 471,761 £2,014,419
The measures, targets and weight for the plan as well as, on a preliminary
basis, the outcomes achieved are shown below.
0%
33.3
7.8 8.3
11.1
Strategic priorities 1/3
Safety and operational risk
Reserves replacement
Major project delivery
Creating long-term shareholder value
Total shareholder return 1/3
Cumulative operating cash flow 1/3
Strategic priorities
Quality
portfolio
Distinctive
capabilities
Clear
priorities
2015-2017 performance shares
BP Annual Report and Form 20-F 2014
80