BG Group has slashed the pay package it had planned for new chief executive Helge Lund following criticism from investors.
The oil and gas services group said the revisions had reduced the value of Mr Lund’s initial share award from around £10m to £4.7m.
Its about-turn comes after a string of investors urged BG Group to halt a vote on the pay package and reconsider the proposal, which departed from the pay policy that shareholders approved in May.
BG Group said the new arrangement meant that 62pc of Mr Lund’s remuneration package in the first year will be subject to performance criteria including total shareholder return, cash flow and efficiency measures. It said the new plan brought “all elements of Mr Lund’s remuneration within the Company’s remuneration policy”, removing the need for a shareholder vote on the matter.
“The board welcomes the active and constructive role played by Mr Lund in revising the remuneration package so that all elements fall entirely within the company’s current policy,” BG Group said in a statement.
Legal & General, the Investment Management Association and the Institute of Directors were among those who raised concerns in public about the package.
Sacha Sadan, director of corporate governance at Legal & General Investment Management said he was “encouraged” by BG’s response.
Mr Lund, who until last month was chief executive of Statoil and is known in Norway as “Mr Oil”, is due to join BG Group on March 2. He will be expected to turn around a company that has suffered a string of production issues and a profit warning.
His pay will include a salary of £1.5m along with a bonus and long-term share awards worth up to six times his basic pay.
Shares in BG Group dropped as much as 3.9pc after markets opened.
By Denise Roland