BP logos are seen at a BP petrol and diesel filling station southeast of London on June 15, 2020.
BEN STANSALL | AFP | Getty Images
LONDON — British energy major BP suffered a shareholder revolt at its annual general meeting on Thursday, following a tense clash with investors over corporate governance and climate transparency.
As the energy major pivots back to its core business of oil and gas and away from renewables, it failed to get majority shareholder approval on two highly anticipated motions, which would have permitted online-only AGMs and retired two company-specific climate disclosure obligations. Each resolution required a 75% vote in favor to pass.
A majority of 81.8% voted in favor of electing Albert Manifold as chair, according to provisional results. His election was in sharp focus following the board’s move to block a proposal put forward by Dutch activist group Follow This.
Board members require 50% of the vote to be elected, and they typically receive close to 100% support.
Some activist investors had said even a 5% vote against Manifold, who has only been in post as chair-elect since September, would represent a severe reprimand, particularly after a historic 24% vote against outgoing chair Helge Lund last year.
Ahead of the AGM at its Sunbury-on-Thames hub in Surrey, BP’s board blocked a motion tabled by Follow This that would have required the company to share plans on creating value for shareholders under future scenarios of falling oil and gas demand.
The contentious decision had raised eyebrows among some investors. Two influential proxy advisers, Glass Lewis and ISS, and one of Europe’s biggest asset managers, Legal & General Investment Management, had recommended shareholders vote against BP’s wishes.
Top investors, such as Norway’s mega oil fund Norges Bank Investment Management (NBIM), had thrown their weight behind BP’s management, along with several other board proposals.
BP had said its board, having taken legal advice, concluded that the Follow This proposal was not valid and would have been ineffective were it to have passed at the AGM.
“All of the board’s decisions relating to the resolutions at this year’s AGM were made in good conscience, made with an aim to build a more valuable BP for our shareholders,” BP’s Manifold said in a statement.
Speaking to CNBC at the AGM, Follow This founder Mark van Baal described the resolution results as “extremely embarrassing” for BP.
Nick Mazan, oil and gas strategy lead at climate group ACCR, said the AGM result was “unprecedented and demonstrates that investors are fed up with BP’s lack of capital discipline and its approach to shareholder rights.”
“This collective show of force puts the new BP leadership team on notice: the company must show its planned surge in upstream investment can deliver shareholder value,” Mazan said.
Woodside Energy boss Meg O’Neill took the reins as CEO at the start of the month. Shares of the London-listed company are up more than 33% year-to-date, outpacing its British rival Shell and U.S. peers Exxon Mobil and Chevron over the same period.
