BP chief executive Bernard Looney’s pay more than doubled to £10mn last year after the UK-listed energy major delivered a record $28bn in profits.
The payout follows a tumultuous year in energy markets driven by Russia’s invasion of Ukraine that led to historic earnings for the oil and gas industry as fossil fuel prices soared.
Looney received a total pay package of £10.03mn for 2022, the company said in its annual report on Friday. That included a base salary of £1.27mn, an annual bonus of £2.37mn paid in cash and shares, and a long-term share award worth £6.01mn for performance over the past three years.
The package, which far exceeded the £4.457mn Looney received in 2021, could have been even higher. The remuneration committee said it had “exercised its discretion” to reduce the annual bonus and long-term share award by a combined £746,000, in part due to four fatalities at BP facilities during the year.
It also exceeded the £9.7mn that BP’s larger rival Shell paid last year to Ben van Beurden, who stepped down at the end of December after nine years in the top job.
Looney was appointed chief executive in February 2020 with an ambitious plan to transform BP into an integrated energy company ready for a net zero emissions world. But he has struggled to win over investors.
In 2020, in the midst of the coronavirus pandemic, BP’s shares fell to a 25-year low and trailed those of its main rivals for his first two years as chief executive.
Helped by high oil and gas prices, BP’s stock has performed better in the past 12 months, rising more than 50 per cent against a 30 per cent increase at Shell.
BP said Looney’s pay, which was still lower than what his predecessor Bob Dudley received in 2019, reflected his success in overhauling BP’s strategy, setting new targets to cut emissions and completing the largest reorganisation in the 114-year-old company’s history.
Paula Rosput Reynolds, chair of BP’s remuneration committee, said the three years since Looney’s appointment had been “among the most challenging” in BP’s recent history. “It took great resilience to introduce our new strategy and extraordinary focus on operations to ensure that the company performed through a pandemic and beyond.”
Part of that strategy has already been tweaked, with BP last month scaling back its industry-leading commitment to reduce emissions by cutting oil and gas output by 40 per cent by 2030, compared with 2019 levels. BP is now targeting a 25 per cent decline, in a move that provoked widespread criticism from environmental groups.
Looney insists the company remains committed to the transformation he started and said more than half of the company’s capital spending will go to its energy transition businesses by the end of this decade.