BP Annual Report and Form 20-F 2011 - Company Reporting

Directors’ remuneration reportShare options (audited)Optiontype At 1 Jan 2011 Granted ExercisedAt 31 Dec2011OptionpriceMarket priceat date ofexerciseDate fromwhich firstexercisableExpiry dateR W Dudley a BP SOP 6,460 – – – b $49.65 23 Feb 2004 22 Feb 2011BP SOP 1,073 – – – b $43.82 17 Dec 2004 16 Dec 2011BP SOP 17,835 – – 17,835 $48.99 18 Feb 2005 17 Feb 2012BP SOP 17,835 – – 17,835 $38.10 17 Feb 2006 16 Feb 2013I C Conn SAYE 1,498 – 1,498 – £4.41 £4.93 c 01 Sep 2010 28 Feb 2011SAYE 617 – – 617 £4.87 01 Sep 2011 29 Feb 2012SAYE 605 – – 605 £4.20 01 Sep 2012 28 Feb 2013SAYE 3,017 – – 3,017 £3.68 01 Sep 2016 28 Feb 2017EXEC 72,250 – – – b £5.67 23 Feb 2004 23 Feb 2011EXEC 130,000 – – 130,000 £5.72 18 Feb 2005 18 Feb 2012Dr B E Grote a EDIP 58,333 – – – b $48.53 25 Feb 2005 25 Feb 2011The closing market prices of an ordinary share and of an ADS on 31 December 2011 were £4.61 and $42.74 respectively.During 2011, the highest market prices were £5.09 and $49.25 respectively and the lowest market prices were £3.63 and $35.22 respectively.EDIP = Executive Directors’ Incentive Plan adopted by shareholders in 2010 as described on page 147.EXEC = Executive Share Option Scheme. These options were granted to the relevant individuals prior to their appointments as directors and are not subject to performance conditions.SAYE = Save As You Earn employee share scheme.BP SOP = BP Share Option Plan. These options were granted to Mr Dudley prior to his appointment as a director and are not subject to performance conditions.aNumbers shown are ADSs under option. One ADS is equivalent to six ordinary shares.bOptions lapsed.cOptions exercised on 22 February 2011. Closing market price for information. Shares were retained after exercise of options.Service contractsService contracts have a notice period of one year and may be terminatedby the company at any time with immediate effect on payment in lieu ofnotice equivalent to one year’s salary or the amount of salary that wouldhave been paid if the contract had been terminated on the expiry of theremainder of the notice period. Other than in the case of Dr Gilvary (whobecame a director on 1 January 2012), the service contracts are expressedto expire at a normal retirement age of 60 (subject to age discrimination).ContractdateSalary as at1 Jan 2012DirectorR W Dudley 6 Apr 2009 $1,700,000I C Conn 22 Jul 2004 £730,000Dr B Gilvary 22 Feb 2012 £690,000Dr B E Grote 7 Aug 2000 $1,442,000Mr Dudley’s contract is with BP Corporation North America Inc. He isseconded to BP p.l.c. under a secondment agreement of 15 April 2009,which expires on 15 April 2012. Dr Grote’s contract is with BP Exploration(Alaska) Inc. He is seconded to BP p.l.c. under a secondment agreementof 7 August 2000, which expires at the date of the 2013 AGM. Bothsecondments can be terminated by one month’s notice by either party andterminate automatically on the termination of their service contracts.There are no other provisions for compensation payable on earlytermination of the above contracts. In the event of the early termination ofany of the contracts by the company, other than for cause (or under aspecific termination payment provision), the relevant director’s then currentsalary and benefits would be taken into account in calculating any liability ofthe company. The committee will consider mitigation to reducecompensation to a departing director, when appropriate to do so.Executive directors – external appointmentsThe board encourages executive directors to broaden their knowledge andexperience by taking up appointments outside the company. Eachexecutive director is permitted to accept one non-executive appointment,from which they may retain any fee. External appointments are subject toagreement by the chairman and reported to the board. Any externalappointment must not conflict with a director’s duties and commitmentsto BP.During the year, the fees received by executive directors forexternal appointments were as follows:AppointeecompanyAdditional positionheld at appointeecompanyTotalfeesDirectorI C Conn Rolls-Royce Senior £74,166independentdirectorDr B E Grote Unilever Audit committee Unilever PLCmember £33,500Unilever NV€48,625Past directorsTony Hayward was engaged by BP to serve as a non-executive directorof TNK-BP until 11 October 2011. For his service during 2011 he waspaid $194,973.150 BP Annual Report and Form 20-F 2011