OILY INC Mass Killer BP Boss Gets pay cut to �7.5m, about $1

http://business.guardian.co.uk/story/0,,2027630,00.html
BP chief executive's pay cut to �7.5m
Terry Macalister Tuesday March 6, 2007

John Browne, BP's chief executive, will stand down this summer after a period of extreme turbulence for the company with a pension pot of �22m and annual retirement income of more than �1m a year, according to the annual report published today.
The oil boss received a �900,000 bonus for his performance in 2006 which took his pay package to �4.57m while further share awards during the 12-month period could raise the total to about �7.5m.
The �4.57m is made up of a slightly-raised salary of �1.53m, �95,000 of "non cash benefits", the performance bonus and �2m from shares vested under a long-term incentive plan. The annual report also notes that Lord Browne was awarded 1.7m shares under the incentive scheme which could easily be worth a further �3m on the basis of previous payouts.
The �4.57m figure was considerably lower than in 2005 when Lord Browne earned �6.35m including a �1.75m bonus, even though BP recorded a 15% increase in annual earnings during 2006.
A BP spokesman said the fall in the chief executive's overall remuneration reflected the difficulties the company had been through in the aftermath of the fatal Texas City fire, Alaskan pipeline spills and investigations into its US trading activities.
But the official defended the �22m pension pot, saying it was based on 40 years of service for the company at the highest levels of the group. "He is worth it," he added.
Lord Browne - consistently voted by his peers as the most admired industrialist in Britain - has been through his worst period at BP in the past year with his reputation tarnished particularly by the Texas City explosion which killed 15 and was partly blamed on cost-cutting by the group.
These problems, and some delays on the start up of key projects, overshadowed BP's strong results in 2006 and eroded the "management premium" which BP's shares had previously enjoyed over rivals such as Royal Dutch Shell.
BP said in January that Lord Browne would step down in July, 17 months earlier than planned, and be replaced by exploration and production head, Tony Hayward.
The early departure was intended to avoid a period of drift during a long handover period as BP sought to recover its reputation through a series of major investments in US infrastructure.
The announcement of Lord Browne's premature departure also followed a disagreement last year between him and chairman Peter Sutherland over whether the chief executive should be made to retire at 60, in line with BP's historic practice.
The oil group has also been struggling this year with increasing pressure from Russian regulatory officials over alleged environmental violations on the Kovykta field in Siberia where state-owned Gazprom has been pushing to take a stake.
Yesterday the 50%-owned Russian business, TNK-BP, said it replaced 129% of its production with new reserves in 2006, ending the year with 7.8bn barrels of oil equivalent.
The reserves replacement figure, audited by consultants DeGolyer & MacNaughton and based on US securities and exchange commission (SEC) methodology, was adjusted to reflect TNK-BP's sale of its Udmurtneft subsidiary during 2006.
BP's success in replacing its reserves contrasts with other Western oil companies such as Shell which are struggling against declining reserves.
Meanwhile BP and its partners also plan to invest $2bn (�1.04bn) to build a pipeline off Vietnam's south coast to deliver gas to power plants onshore from two new gas fields, Moc Tinh and Hai Thach.
"The pipeline will enable us to supply more natural gas to power plants," a spokeswoman for the company said in Hanoi. "Negotiation is likely to last for sometime, so we do not have a time frame for the project at this moment," she added.
BP is the operator of Vietnam's only operational pipeline, Nam Con Son, built at a cost of $1.3bn and sends about 13.2m cubic metres of gas a day from the offshore Lan Tay-Lan Do gas field.
Last week BP said it planned to raise average gas deliveries to power plants in Vietnam's southern region by nearly 14% to 15m cubic metres a day by the end of this year to meet surging demand from power plants in the industrial hub.