BP chief set for £5m payoff

Bp chief executive Lord Browne's pay packet has shrunk for the second year running but he is in line for a payment of nearly £5.3m when he retires in July.

Bp chief executive Lord Browne's pay packet has shrunk for the second year running but he is in line for a payment of nearly £5.3m when he retires in July.

Lord Browne, who has come under attack after disasters including the deaths of 15 workers in the 2005 Texas City refinery fire, announced in January that he would step down earlier than originally intended.

BP's annual report reveals that on his departure date of July 31 he will gain a lump sum equivalent to his full £1.57m salary, a testimonial payment worth another year's wages, and bonus worth £2m. There is also an extra £90,000 in "fringe benefits", the report said.

And after 40 years with the oil company, the 58-year-old will also enjoy a lucrative pension worth more than £1m a year - along with share options which could net up to £3m based on previous awards and share performance.

Despite record results at BP last year, Lord Browne's bonus was slashed by nearly half to £900,000 from £1.75m the previous year.

Including wages and shares, his overall package fell from £6.35m to £4.57m in 2006.

His successor, BP head of exploration and production Tony Hayward, also saw his bonus fall from £460,000 to £250,000 last year, although his salary did jump from £485,000 to £750,000 when unveiled as the next chief executive.

Lord Browne's "fringe benefits" include the cost of a car and driver after his retirement.

Overall bonus payouts to BP's board of directors fell from £3.6m to £2.1 million in 2006.

A company spokesman said bonus payments hinged on a "number of factors" including operational and safety performance, as well as the share price.

Former US secretary of state James Baker said BP "did not emphasise process safety" at the Texas refinery and made 10 recommendations for it to improve safety performance and corporate culture after an inquiry into the matter published in January.

Last August the discovery of pipeline corrosion forced BP into the partial closure of Prudhoe Bay, which is the largest field in the United States.

Despite the problems the company still made profits of £11.34bn during 2006.

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