Former chief executive Frank Chapman and other top bosses at BG Group will get no performance bonus for 2012 because of the weakened position of the company, even though they met the criteria for one to be considered.
Chapman and other top executives decided a cash bonus would be "inappropriate" given the downgrade it made to output forecasts and the share price fall in the final quarter of the year, BG said in its annual report released on Thursday.
BG's new CEO Chris Finlayson, who took over from Chapman at the end of 2012 earlier than expected due to Chapman's illness and after a flurry of bad news for the company, will get a base salary of £975,000 ($1.48 million) this year, plus cash in lieu of a pension at 30% of base salary.
His annual incentive scheme bonus for 2013 will have a target of 100% of base salary, with a maximum of 200%, plus share awards under the company's long term incentive plan.
Finlayson's base salary is lower than that of Chapman, who was paid 1.233 million pounds in 2012. Chapman's last pay as CEO was up 3.4% from 2011, but his total cash take-home will be dramatically lower, given that he also received a 1.652 million pound bonus in 2011 and will not get one for last year.
Chapman, one of the longest serving CEOs in the industry with 12 years at the helm, will continue to draw his salary and other elements of his BG pay package until he retires completely in June this year.
In February this year, BG abandoned its ambitions to become a 1 million barrels per day oil and gas producer by 2015, and reported a 29% drop in quarterly net profit after taking stock of a series of setbacks that included project delays in Brazil, production difficulties in Egypt, and a scaling back in U.S. shale gas activities as prices there fell.
The decision comes amid increasing shareholder scrutiny of executives' performance related pay.
