BP 2015 Annual Report Download - page 81

Corporate governance
Executive directors
Total remuneration summary 2015
The table below shows the total remuneration received by executive
directors in 2015 and reflects the following:
Salary – no increases were granted for 2015, in line with the group-wide
salary freeze. The last increase was in July 2014.
Annual bonus – the key focus for 2015 was safe and reliable operations,
delivery of strong operating cash flow relative to plan and major projects
within the year. This resulted in a final overall group score of 1.70 but
limited to 1.50 for executive directors.
Deferred bonus – 2012 deferred bonus was conditional on safety and
environmental sustainability performance over the period 2013 through to
2015. There was strong and consistent delivery against this hurdle and
2012 deferred and matching shares vested in full.
Performance shares – vesting was based one third on relative total
shareholder return (TSR), one third on operating cash flow and one third on
strategic imperatives including safety and operational risk (S&OR), relative
reserves replacement ratio (RRR) and major project delivery★. TSR
performance was third amongst the oil majors. There was strong
performance related to operating cash flow and the strategic imperatives.
On a preliminary assessment 77.6% of the 2013-2015 award is expected
to vest.
Pension – pension figures reflect the UK requirements to show 20 times
the increase in accrued pension over the year for defined benefit plans, as
well as the company match to retirement savings plans and any cash paid
in lieu. The UK requirement overstates the true increase in value of Bob
Dudley’s US pension (see page 82 for explanation).
Single figure table of remuneration of executive directors in 2015 (audited)
Remuneration is reported in the currency received by the individual
Bob Dudley
thousand
Dr Brian Gilvary
thousand
Annual remuneration 2015 2014 2015 2014
Salary $1,854 $1,827 £732 £721
Annual cash bonusa $1,391 $1,005 £549 £396
Benefits $119$114 £53 £51
Total $3,364$2,946 £1,334 £1,168
Vested equity
Deferred bonus and matchb $2,603 $3,401 £1,272 £0
Performance shares $7,116 c$7,020d£2,223c£2,185d
Total $9,719 $10,421 £3,495 £2,185
Total remuneration $13,083$13,367 £4,829 £3,353
Pension
Pension and retirement savings – value increasee $6,519 $3,023 £0 £21
Cash in lieu of future accrual N/A N/A £256 £252
Total including pension $19,602 $16,390 £5,085 £3,626
a
This reflects the amount of bonus paid in cash with the deferred portion as set out in the conditional equity table below.
b
Value of vested deferred bonus and matching shares. The amounts reported for 2015 relate to the 2012 annual bonus deferred over three years, which vested on 9 February 2016 at the market price of
£3.34 for ordinary shares and $28.95 for ADSs and include re-invested dividends on shares vested. The amounts reported for 2014 relate to the 2011 annual bonus.
c Represents the assumed vesting of shares in 2016 following the end of the relevant performance period, based on a preliminary assessment of performance achieved under the rules of the plan and
includes re-invested dividends on shares vested. In accordance with UK regulations, the vesting price of the assumed vesting is the average market price for the fourth quarter of 2015 which was £3.72
for ordinary shares and $33.81 for ADSs. The final vesting will be confirmed by the committee in second quarter 2016 and provided in the 2016 Directors’ remuneration report.
d In accordance with UK regulations, in the 2014 single figure table, the performance outcome value was based on an estimated vesting at an assumed share price of £4.27 for ordinary shares and
$40.74 for ADSs. In May 2015, after the external data became available, the committee reviewed the relative reserves replacement ratio position and assessed that the group was in first place relative
to the other oil majors. This resulted in an adjustment to the final vesting from 60.5% to 63.8%. On 7 May 2015, 167,824 ADSs for Bob Dudley and 478,090 shares for Brian Gilvary vested at prices of
$41.83 and £4.57 respectively. The 2014 values for the total vesting have increased by $628,746 for Bob Dudley and £280,827 for Brian Gilvary.
e
Represents (1) the annual increase net of inflation in accrued pension multiplied by 20 as prescribed by UK regulations, and (2) in the case of Bob Dudley only, the aggregate value of the company match
under his US retirement savings arrangements. Full details are set out on page 82. In Bob Dudley’s case, the 2014 amount has been restated to reflect the revised disclosure of Mr Dudley’s
participation in the US retirement savings arrangements.
Conditional equity – to vest in future years, subject to performance
Bob Dudley Dr Brian Gilvary
Deferred bonus in respect of bonus year 2015a2014 2015a2014
Total deferred bonus Value (thousand) $2,781 $2,010 £1,097 £793
Total deferred converted to shares Shares 551,784 29 4,108 318,042 176,576
Total matched shares Shares 551,784 294,108 318,042 176,576
Vesting date Feb 2019 Feb 2018 Feb 2019 Feb 2018
Release datebFeb 2022 Feb 2021 Feb 2022 Feb 2021
Performance share element 2015-2017 2014-2016 2015-2017 2014-2016
Potential maximum shares 1,501,770 1,304,922 685,246 605,544
Vesting date Feb 2018 Feb 2017 Feb 2018 Feb 2017
Release date Feb 2021 Feb 2020 Feb 2021 Feb 2020
a It is anticipated that the 2015 deferred bonus award will be made in May 2016.
b Deferred shares are released at vesting with the exception of matched shares which normally have a further three-year retention period.
Defined on page 256.BP Annual Report and Form 20-F 2015 77