A payout for the boss of BP has been labelled a “kick in the teeth” for consumers battling the cost of living crisis, as chief executive Bernard Looney saw his pay package more than double to £10m after the oil and gas giant landed record profits linked to the war in Ukraine.
His package included a salary of £1.4m, a bonus of £2.4m – down fractionally on 2021 – and a £6m share award, as well as benefits. The total package was 120% more than the £4.5m he received in 2021.
BP last month reported annual profits of £23bn after its earnings jumped because of soaring wholesale gas prices, prompted by Russia’s invasion of Ukraine and cuts to supplies into Europe.
Looney could have received a bonus of up to £11.4m under a three-year share award plan that was devised in 2020, when the pandemic punctured oil demand and forced BP to cut 10,000 jobs. The shares have risen more than 174% since their Covid low point.
The share award was 54% of the possible maximum due to Looney, while his bonus was 76% of the maximum.
The recovery in oil and gas prices has led to record profits during the energy crisis. BP and its rivals have been lambasted by MPs and campaigners for raking in huge profits while households struggle to pay their gas and electricity bills.
Campaigners have called for energy firms to face tougher windfall taxes and for bonuses to be cut. Chris O’Shea, the chief executive of the British Gas owner, Centrica, refused to say whether he would waive a forthcoming bonus of up to £1.6m.
Greenpeace UK’s head of UK climate Mel Evans, said: “As families open their energy bills this month, consumed with worry about how they will make ends meet, enormous bonuses are dished out to energy bosses.
“It’s fundamentally wrong that energy companies are profiting from a war overseas, whilst at the same time increasing wealth inequality in the UK.”
Evans called on the government to toughen the windfall tax on North Sea oil and gas operators.
Global Witness said Looney’s pay package was 300 times the UK average worker pay and alone equal to the energy bills of 4,000 British households.
Jonathan Noronha-Gant, senior fossil fuels campaigner at Global Witness, said: “People everywhere struggling to feed their families or warm their homes in the harsh winter months, have every right to be angry that the CEO of a huge energy firm is netting millions of pounds in pay.
“This enormous pay package is a kick in the teeth to all hardworking people being faced with a cost-of-living crisis.”
On Thursday, BP’s rival Shell said that its former chief executive, Ben van Beurden, who stood down at the end of last year, had seen his total pay rise from £6.3m in 2021 to £9.7m in 2022. His bonus rose from £2.2m in 2021 to £2.6m in 2022.
The Sunday Times reported last month that BP had faced pressure from investors over the level of payouts to executives. The company said it had consulted with investors before making the pay decision.
Paula Rosput Reynolds, the chair of BP’s pay committee, said: “The vast majority of [Looney’s] remuneration is explicitly linked to performance over the three year period. During that time almost all of the metrics that we set forth – and which were endorsed by shareholders – have been met. Nevertheless, the [remuneration committee] looks beyond the mechanics of metrics.
“We carefully reflected on the wider context and chose to use our discretion to reduce the overall outcome. We believe the outcome reflects the complexity of Bernard’s job of running our global enterprise and its diverse and essential businesses.”
Looney’s bonus was reduced in part due to an assessment of the company’s safety record – four members of its workforce died on the job in 2022 and its “recordable injury frequency” rate also rose, by 14%.
BP caused dismay last month by cutting its emissions pledges and plans a greater production of oil and gas over the next seven years compared with previous targets.