BP PLC encountered significant shareholder dissent during its annual general meeting on Thursday, following intense disputes with investors over corporate governance and climate transparency.
As the energy giant shifts its focus back to its core oil and gas operations, moving away from renewable energy, it failed to secure majority shareholder approval for two highly anticipated resolutions. These proposals would have permitted fully virtual annual meetings and eliminated two company-specific climate disclosure requirements. Each resolution required 75% support to pass.
Preliminary results showed that 81.8% of shareholders voted in favor of electing Albert Manifold as chairman. His election became a focal point after the board decided to block a proposal submitted by the Dutch activist group Follow This.
Board members typically need 50% of votes to be elected and usually receive near-unanimous support.
Some activist investors had indicated that even a 5% vote against Manifold—who only became chairman-elect last September—would represent a strong rebuke, particularly after a record 24% voted against outgoing chairman Helge Lund the previous year.
Ahead of the annual meeting held at its headquarters in Sunbury-on-Thames, Surrey, BP’s board blocked a motion from Follow This that called on the company to disclose plans for creating shareholder value under scenarios of declining oil and gas demand.
This controversial decision raised concerns among certain investors. Two influential proxy advisory firms, Glass Lewis and ISS, along with Legal & General Investment Management, one of Europe’s largest asset managers, had recommended that shareholders vote against BP’s position.
Several major investors, including Norway’s substantial oil fund Norges Bank Investment Management (NBIM), supported BP’s management and several other board proposals.
BP stated that its board, after seeking legal advice, concluded that Follow This’s proposal was invalid and would not be binding even if approved at the annual meeting.
In a statement, BP’s Manifold said, “All decisions made by the board regarding this year’s AGM resolutions were made in good conscience and with the aim of building a more valuable BP for our shareholders.”
Follow This founder Mark van Baal told CNBC during the meeting that the resolution outcome was “extremely embarrassing” for BP.
Nick Mazan, oil and gas strategy lead at climate group ACCR, described the AGM results as “unprecedented,” indicating that “investors have grown tired of BP’s lack of capital discipline and its approach to shareholder rights.”
Mazan added, “This collective show of strength sends a clear message to BP’s new leadership: the company must demonstrate that its planned surge in upstream investments will deliver value for shareholders.”
Meg O’Neill, who took over as CEO earlier this month, leads the London-listed company. BP’s share price has risen more than 33% year-to-date, outperforming UK rival Shell as well as US peers Exxon Mobil and Chevron.
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