BP Chief Executive takes huge pay cut as profit slashed at FTSE 100 giant

BP's Chief Executive Murray Auchincloss has accepted a significant decrease in pay, with his earnings for 2024 totalling £5.4 million, down from £7.7 million the prior year, marking a £2.3 million reduction as the oil titan saw its profits diminished.

The adjustment was influenced by more than a £1.1 million slash to his bonus, bringing it to £734,000, and a substantial drop of £1.6 million in share-related payments, now at £2.8 million, as reported by City AM.

Despite this, Auchincloss's base salary experienced an uptick of around £450,000, culminating in £1.5 million.

The financial shift surfaces in light of BP's announcement last month that net income had taken a downturn to $8.9 billion (£7.2 billion) in 2024, retreating from $13.8 billion in the preceding year.

The downturn was attributed to slumping oil and gas market prices and a contraction in profitability from its refining operations.

Tushar Morzaria, standing as the interim chair of BP's remuneration committee, made reflections on the company's performance in the annual report: "2024 has been a challenging year operationally but one in which BP has set the foundations for growth as a simpler, more efficient business."

He continued with a candid assessment, stating, "Nevertheless, it was a difficult year in parts of our customers and products businesses, particularly in refining."

"Margins were lower and the significant power outage at our refinery in Whiting had a direct impact on our operational and financial performance during the year, which is in turn reflected in remuneration outcomes."

Additionally, he commented on the role played by "The macroeconomic environment and lower prices added to a challenging backdrop."

The annual report follows last month's news from City AM that BP plans to increase its oil and gas expenditure by $10bn (£7.9bn), cut back on renewable energy investment, and dispose of $20bn worth of underperforming assets as part of a significant strategic revamp aimed at enhancing its struggling share price.

In a much-awaited – and postponed – announcement, CEO Murray Auchincloss informed shareholders that the British petrochemical behemoth would no longer adhere to the ambitious transition targets it set for itself five years ago.

Under Auchincloss's predecessor, BP committed in 2020 to decrease its oil and gas production by 40 per cent while concurrently increasing its renewable target over the subsequent decade. The company also vowed to eventually achieve complete net zero by 2050.

However, last month's announcement – made just two weeks after activist investor Elliot Management acquired a £3.8bn stake in the London-listed oil giant – marked a drastic shift from those objectives, aligning the group's energy mix more closely with that of UK competitor Shell.

BP has been under increasing pressure from shareholders to strengthen its more profitable oil and gas sectors at the expense of the renewable strategy implemented by former CEO Bernard Looney.