BP shareholders punish Helge Lind with low support
BP's Murray Auchincloss, CEO and Helge Lund, Chair were reelected on Thursday. However, the dramatically reduced level of support from shareholders for Lund may mean that his departure earlier than expected is possible.
BP's Board was up for reelection at the annual general meeting. The group faced activist shareholder Elliott Management, as well as criticism from climate-focused shareholders who had demanded a vote against Lund.
BP has worked to increase its share price, whose stock had been underperforming that of rivals Shell and Exxon, for years. This pressure increased when Elliott Management acquired a nearly 5 percent stake in recent weeks.
Provisional results show that Auchincloss won 97% of the votes, while Lund received an uncharacteristically low 75.7%.
Typically, board members are elected with a majority of 50% and a total near 100%.
Lund announced in this month that he will likely step down by 2026.
Before the poll results were announced, board member Amanda Blanc who is responsible for finding Lund's replacement told shareholders that everyone was interested in keeping the transition period short and that the search had begun.
Lund and Auchinloss both supported the 2020 plan of former chief Bernard Looney to reduce BP's oil production by 40% in this decade, and invest heavily into renewables. BP began to backtrack a few months later.
Auchincloss was the finance chief for Looney and said that BP would abandon its plan in February and focus solely on oil and natural gas.
Some investors who are concerned about climate change are upset that BP didn't offer a vote regarding the U-turn in strategy.
Why don't we vote on this level of ambition (climate change)? Matt Crossman, director of stewardship at UK asset management firm Rathbones, asked: "Why aren't we voting on that level of (climate) ambition?
Legal & General - a shareholder in the top 10 of BP according to LSEG - called for a vote on Lund, citing concerns about climate change and governance.
Lund informed shareholders that the board was encouraged by the level support it received in its engagement with investors and had not seeded a majority requesting a vote on climate change.
He told the shareholders that BP has learned from its mistakes.
The company was pursuing too many goals while trying to create new businesses that were low-carbon. Some existing businesses were not operating with the reliability and efficiency expected. "I can assure you that lessons have been learnt from this", he said.
Elliott Management didn't ask any questions to BP's Board of Directors at the meeting on Thursday.
Influential proxy advisors Institutional Shareholder Services Inc. (ISS) and Glass Lewis recommended that shareholders vote for the reelection of BP’s 12-member board.
(source: Reuters)
