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Last Updated: Thursday, 12 April 2007, 13:29 GMT 14:29 UK
BP investors back Browne payout
BP chief executive Lord Browne
BP says it is right to include Lord Browne in the incentive scheme.
BP investors have approved a pay report which includes its outgoing chairman in a three-year incentive scheme.

Lord Browne will leave BP with a 5.3m pay-off in July and a 21.7m pension, as well as millions of pounds in shares due under the incentive plan.

Opposition from individual shareholders to directors' pay, including that of Lord Browne, overshadowed the company's annual general meeting.

Institutional support meant the report was approved by 83% of shareholders.


Some shareholders had been keen to reject the company's pay report under which Lord Browne - despite leaving the firm this July - will share in a three-year incentive scheme, entitling him to payouts until 2009.

However, chairman Peter Sutherland defended Lord Browne's pay packet.

"Lord Browne's retirement was brought forward by mutual agreement and he should not be penalised for the decision, given the years he has spent building up the company," Mr Sutherland said.

At the meeting one shareholder, Mike Porter, said BP had "broadly underperformed" the FTSE 100.

Another, John Farmer, called upon the board to justify pay packages, saying the company's performance was "arguably pathetic".

The Pensions Investment Research Consultancy (PIRC), which advises pension funds and fund managers, had expressed "significant concerns" over the plan and had advised members to vote against the report.

Labour leadership contender Michael Meacher was also among those calling on BP shareholders to try to block Lord Browne's payoff which he described as "grotesque".

"We need to end the situation where City bosses set each other's rewards," he said.

However, the Association of British Insurers has cleared the pay package after BP halved the bonuses of directors last year.

Accidents and oil spills

BP said in March that Lord Browne's pay packet had shrunk for the second year in a row to 4.57m in 2006, down 28% from 2005.

The oil firm announced in January that Lord Browne would retire in July, 18 months ahead of his original departure date at the end of 2008.

BP has suffered problems in recent years including oil spills in Alaska and an explosion at one of the firm's US refineries in 2005 in which 15 people died.

Lord Browne has been with BP for 40 years, and led the firm for 12.

Library footage of outgoing BP boss Lord Browne

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