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SKAGEN has a clear view on executive pay, published in our ESG policy, launched earlier this year. The policy clearly states that we "support well-designed compensation plans that can be effective in aligning management with shareholder interests." We will therefore also vote against executive compensation plans when we feel this is not the case, as it was in this instance.

According to Bloomberg News, more than 59 percent of shareholders rejected BP's remuneration report. Although the vote was only to approve the report on pay, the company has now stated that they will respond with changes to the way it pays its executives, according to the same news report.

"It is important that compensation is appropriately linked to long-term shareholder returns," says Knut Gezelius, lead portfolio manager of the equity fund SKAGEN Global. "Of course specific situations may call for unique responses and we will always take market and company conditions into consideration. But, this was not one of those instances."

Although a small shareholder, the SKAGEN Global fund strategy has 430 million Norwegian kroner (USD 46 million) invested in BP and has been an owner since 2005.

The CEO's total compensation increased to USD 19.6 million in 2015, which is 20 percent higher than in 2014, according to the annual report. The CEO pay increase comes at the same time as the share price is down 28 percent measured in USD in the past year amid a slump in oil prices. In response to the slump, the company has said it plans to cut 7000 jobs and has introduced a freeze in employee salaries.


Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager's skill, the fund's risk profile and management fees. The return may become negative as a result of negative price developments.