BP cuts CEO pay by $8 million after shareholder revolt

New sponge could help clean up oil spills
New sponge could help clean up oil spills

The boss of oil firm BP just took a huge pay cut.

CEO Bob Dudley's total pay package for 2016 was cut by 40% to $11.6 million, BP said in its annual report.

The reduction follows a rare shareholder revolt last year when 59% voted against Dudley's 2015 pay and benefits package worth $19.6 million.

Shareholders protested his pay getting bumped up 20% despite a weaker performance by BP (BP) in 2015, when it reported an annual loss of $5.2 billion and its share price slumped. Dudley still got his money since the vote wasn't binding.

The company said it has overhauled its executive pay policies since then, and the changes will be put to a binding vote of shareholders.

"It is clear that shareholders and other stakeholders would like our remuneration policy to be simpler, more transparent, and to lead to reduced levels of reward," the head of BP's remuneration committee, Ann Dowling, said in a letter to investors.

"As a result -- in a year of good performance and progress -- Bob Dudley's total single figure for 2016 has been reduced by some 40% compared to last year," she said.

Related: Big Oil could be ready for a big comeback

The company's loss narrowed to about $1 billion last year. Like its peers, BP struggled in 2016 as oil prices fell as low as $26 per barrel. They've recovered since to around $50 per barrel but are still a far cry from the $100-plus level seen in previous years.

bp ceo bob dudley
Bob Dudley took over as CEO of BP in 2010 amid outrage over the firm's oil spill in the Gulf of Mexico.

Despite the pay cut, the millions going to Dudley stand in stark contrast to the average salary of workers in the U.K., where BP is headquartered.

The average annual salary for full-time British workers stands at just over £28,200 ($35,200).

Dudley can make that amount of money in just nine hours on the job, based on his new compensation levels.

BP says Dudley's total pay is 71 times the average paid to its managers in Britain and the U.S.

Social Surge - What's Trending

Newsletter