Linking Bonuses to safety
UK: Call for BP chiefs to have bonuses linked to safety
UK shareholders are calling for BP directors to have their bonuses linked closer with the company's safety and environmental performance, following incidents such as the March 2005 Texas City refinery fire, where 15 people were killed and 180 were injured. The Local Authority Pension Fund Forum has called on BP chair Peter Sutherland to address the issue of how senior executives' pay is related to non-financial issues. Corporate governance body Pirc, which has been advising the local authority pension funds, said: 'Health and safety and environmental criteria should have a more prominent role in the executive remuneration performance indicators of energy companies.' The pressure on BP comes as incoming chief executive Tony Hayward prepares to meet former US Secretary of State James Baker, who last week savaged BP in an a BP-commissioned report into its safety performance in the United States, which said a 'corporate blindspot' on safety went right up to the London-based global board, headed by chief executive Lord Browne. Pirc said it was awaiting 'with interest' a response from the oil group. BP said this week that annual bonuses for executives were already linked to health and safety and environmental issues. The company added that Texas City and other problems in the US were partially responsible for Lord Browne's 2005 annual bonus being cut to £1.75m (A$4.35m), from £2.28m (A$5.7m) for the year before - although his overall pay package increased by almost £700,000 (A$1.75m)!
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