Daily Mail

£16m pay cut for two of Britain’s fattest cats

BP tycoon and pharma boss set for bonus chop

- Alex Brummer Victoria Ibitoye by and

TWO of the City’s top earners are having their pay slashed as the backlash against fat- cat bonuses gains traction.

The Mail understand­s Bob Dudley, chief executive of BP, is set to have his pay cut by up to 40pc to £8m.

Yesterday, meanwhile, it was revealed that Rakesh Kapoor, boss of Reckitt Benckiser, the consumer goods giant behind Harpic and Nurofen, had seen more than £10m knocked off his earnings. Both chief executives had faced anger for pocketing mammoth pay deals in 2015.

Dudley was criticised when his pay shot up by 20pc to £14m in a year when the group ran up losses of $5.2bn, largely as a result of having to absorb the final bill for the Deepwater Horizon explosion and oil spill in the Gulf of Mexico in 2010. BP, which has been wrestling with the issue of Dudley’s pay, bonuses and pension entitlemen­t for several months, is expected to award him £8.4m for 2016 – a substantia­l fall.

In a further boost to investors, the BP board is expected to confirm the company’s generous dividend will be maintained.

There has been concern its yield of 7pc was unsustaina­ble. The cost of paying the dividend is thought to be around $7bn, which the board believes is an acceptable sum to be spending on shareholde­rs for a company that spends $15bn to $17bn a year on new exploratio­n and production projects, and has other cash costs of around $20bn a year.

While both decisions are likely to keep investors happy, Dudley is understood to believe he has been unfairly targeted, since last year’s pay was inflated by a larger-than-usual pension reward relating to his previous employment in the US.

It is thought Dudley, who was travelling when the 2015 pay report was put together, was horrified by last year’s package and wished he’d had a chance to amend it before it went to the printers and was distribute­d.

At the time, 59pc of shareholde­rs had voted against the award.

BP has also argued that Dudley was unfairly targeted, as the company has been stabilised under his management, suggesting he could not be blamed for the $63bn of losses BP he was forced to absorb as a result of the Deepwater Horizon scandal.

Kapoor faced shareholde­r backlash after his pay more than doubled to £25.5m in 2015 despite the firm being hit with a number of fines over corporate governance. His 2016 pay cut was as a result of a safety scandal in South Korea that led to a boycott of Reckitt’s products and a £300m compensati­on payout.

It claimed responsibi­lity for 92 deaths after its steriliser product Oxy Sacsac, which was put inside humidifier­s, was linked to a spate of fatal lung problems between 2001 and 2011.

The firm’s annual report yesterday revealed he was paid £14.6m in 2016, did not receive a bonus and had his long-term incentive rewards reduced by half.

Newspapers in English

Newspapers from United Kingdom