Oil giant BP suffers AGM shareholder revolt
BP logos are seen at a BP petrol and diesel filling station in south-east London on 15 June 2020.
BEN STANSALL | AFP | Getty Images
LONDON — British energy giant blood pressure It faced a shareholder revolt at its annual general meeting on Thursday following tense clashes with investors over corporate governance and climate transparency.
As the energy giant returns to its core business of oil and gas and moves away from renewables, it failed to win majority shareholder approval for two highly anticipated proposals that would allow online-only general shareholders’ meetings and remove two company-specific climate disclosure obligations. Each resolution received approximately 47% support; This was well below the 75% required to pass.
According to provisional results, a majority of 81.8 percent voted to elect Albert Manifold as president. He became the focus of his election following the board’s move to block a proposal put forward by Dutch activist group Follow This.
50% of the vote is required to elect board members, and they usually receive close to 100% support.
Some activist investors had said that even a 5% vote against Manifold, who has only been president since October, would amount to serious condemnation, especially after last year’s historic 24% vote against outgoing chairman Helge Lund.
BP’s board has blocked a motion put forward by Follow This ahead of its AGM at its Sunbury-on-Thames headquarters in Surrey, which would have required the company to share its plans to create value for shareholders under future scenarios of falling oil and gas demand.
The controversial decision drew reaction from some investors. Glass Lewis and ISS, two influential proxy advisors, and Legal & General Investment Management, one of Europe’s largest asset managers, had recommended shareholders vote against BP’s wishes.
Leading investors such as Norway’s mega oil fund Norges Bank Investment Management (NBIM) have weighed in on BP’s management, among other board bids.
BP had said that its board had taken legal advice and concluded that the Follow This proposal was not valid and would have been ineffective had it been accepted at the AGM.
“All the board’s decisions regarding the resolutions at this year’s AGM have been taken in good conscience, with the aim of building a more valuable BP for our shareholders,” BP’s Manifold said in a statement. he said.
Speaking to CNBC at the General Assembly, Follow This founder Mark van Baal called the settlement results “deeply embarrassing” for BP.
Woodside Energy boss Meg O’Neill took the reins as CEO at the start of the month. Shares of the London-listed company have risen more than 33% since the beginning of the year, outperforming its British rival Shell and their US counterparts ExxonMobil And Strip in the same period.
About 26% of BP shareholders also backed a resolution submitted by climate group ACCR and a group of other investors calling on BP to justify capital discipline in its oil and gas investments. The company will now need to consult and report to its shareholders on the matter.
Nick Mazan, oil and gas strategy leader at climate group ACCR, said the AGM outcome was “unprecedented and shows investors are fed up with BP’s lack of capital discipline and approach to shareholder rights”.
“This collective show of strength has the attention of the new BP leadership team: The company needs to show that its planned increase in upstream investments can deliver value to shareholders,” Mazan said.
