Just like Napoleon, Leon Trotsky and (presumably by early July) England football manager Gareth Southgate, BP boss Bob Dudley knows all about swift retreats from Russia.
In 2008 the veteran oil exec fled the country, and his then post as head of BP’s Russian joint venture TNK-BP, following an “orchestrated campaign of harassment”.
Still, having become chief executive of the whole of BP in 2010, Dudley now takes his persecution from more genteel City types, and who would blame him for that?
The flight from Moscow – it was provoked by some henchman bugging Dudley’s office, among other things – has always sounded mildly terrifying. But it has been replaced in Dudley’s life by the confected spectacle of the annual “BP pay row”, where a few fund managers politely ask the American each year if he might consider sparing the chaps any embarrassment by not trousering such a vulgar pay packet. Somehow, that lacks similar levels of menace.
The recent headlines reveal what a charade a City campaign of harassment can be: “BP risks fresh pay row in 2017 over boss Dudley’s share award” (Sky News); “BP faces investor revolt over chief executive’s pay” (Financial Times, 2016); “BP boss faces investor protest vote against £10m pay packet” (Daily Mail, 2015).
With the group’s shareholders preparing for the oil major’s latest annual meeting this week, the same stories have returned again. Shareholder advisory service Pirc has told BP investors: “Performance share awards granted during the year under review are excessive, amounting to 363.7% of salary for the chief executive. Total variable pay for the year under review is also inappropriately excessive, amounting to 581% of salary.”
Yet despite all of this noise and common sense, shareholders will get to vote this week on a pay packet of $13.4m (£9.9m) – which has actually risen from the $11.9m that appeared to be causing so much irritation the year before.
You’d be forgiven for thinking that Dudley simply has to endure a bit of sniping each May as a condition of earning eight figures. So, maybe he should be asked to take a pay cut by a shadowy figure with a Russian accent who Dudley discovers sitting in his office one morning? At least that would be original.
Still, while avarice might be one of the seven Dudley sins, the system looks more culpable. Rival Royal Dutch Shell, which is also facing a “pay revolt” this week, has been criticised by the admirably persistent Pirc too for its “excessive” executive pay. Chief executive Ben van Beurden’s “total realised variable pay” is considered “excessive” at 471% of his base salary and there has been a similarly depressing history of these protests.
But all of these huge wage packets are devised by businesspeople – whose own interests are hardly served by suppressing executive pay. On Shell’s remuneration committee is Gerard Kleisterlee, a former Philips boss who the FT says was “unrepentant” when he got caught up in a pay row at the electronics group.
At BP, the longest-serving member of the remuneration committee is Ian Davis, the former boss of management consultant McKinsey, a firm which some partly credit with creating the “CEO-to-worker gap” in pay through its efforts in the 1950s with General Motors. Tactics may be more civilised in the City, but when comparing London to Moscow it is tempting to ask one question: which city runs the biggest racket?
