I usually take a stern view of corporate pay packets that are out of line with profits and shareholder value, but I’m prepared to make an exception for Bob Dudley. The American-born chief executive of BP collected $19.6 million last year, up 20 per cent on his 2014 remuneration, while the embattled oil giant clocked up a record loss of $6.5 billion and shed thousands of jobs. But even in the rugged world of oil and gas, few men have survived tougher career challenges than Dudley, who in his previous role as head of the Russian joint venture TNK-BP was so threatened by hostile locals that he had to operate from an undisclosed location outside Russia. He went on to deal with the $55 billion consequences of the Gulf of Mexico oil spill that happened under his predecessor Tony Hayward, and to cope with a plunge of oil prices that has thrown the entire industry’s capital investment plans into chaos.
The share price is half what it was before the Gulf of Mexico incident six years ago, but it’s a minor miracle that BP is still an independent company — or even in business at all — after so many setbacks. Dudley deserves to be paid plenty, and no one can say he has been rewarded for failure.
An exception of a different kind is Michael Dobson, long-serving chief executive of fund management group Schroders, who has drawn City criticism for easing himself into the chairman’s office with the support of Schroder family shareholders — his firm having occasionally voted on principle against just such promotions in companies in which it invests. But that never made sense to me as a hard-and-fast rule of corporate correctness, and there’s reason for Dobson to stay if institutional clients value his steady hand. Nevertheless we might all wonder in passing why Dobson has to be paid almost twice as much as Schroders’ previous chairman, Andrew Beeson. And underlings who had hoped and perhaps even plotted to say farewell to this famously aloof operator (the FT once called him ‘inscrutable and immovable’) will find his continuing presence less than comfortable.
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