£1.5m rise for BP chief

BP chief executive Lord Browne has increased his pay and benefits by more than half to £3.1 million, despite a fall in the oil giant's annual profits, it emerged today.

Lord Browne, ennobled by Tony Blair last year, saw his pay and other benefits rise by 58 per cent in 2001 from his package in 2000 - a year in which he did not take a pay rise.

Falling crude oil prices saw BP's worldwide profits down 7.2 per cent in 2001 to £9.3 billion, from a record £10billion in 2000. The UK profit was £1.9billion last year, compared with £2.6 billion in 2000. The group is cutting 2,000 jobs in order to reduce expenses during 2002.

Lord Browne's 58 per cent increase is largely due to an annual performance bonus, which nearly doubled to £1.8million, according to the company's annual report and accounts, published today. The £1.5 million windfall should ease the pain of a loss on the BP shares he holds; a falling stock market shaved about 15 per cent, or £650,000 off their value last year, making them worth £2.6 million.

BP today claimed to be staying out of the current round of price increases at the pumps, fuelled by fears of oil shortages should the US attack Iraq. Four months ago, Lord Browne said: "The (oil) price could go anywhere. There is too much oil and too little demand.

"Our average pump price in January was 70.9p per litre, and as of today it's 71.9p, and that reflects an increase in the price to us, which has gone up from 10.2p per litre to 11.4p in that time - BP has not implemented a national price increase in that time."

BP said: "John Browne has transformed BP from a solid, secondleague player to the second largest oil company in the world."

Lord Browne took over at once debt-ridden BP seven years ago. He has astutely ridden falls in the oil price to bring off mergers, acquisitions and other deals with Amoco - then the world's biggest industrial merger. BP last year hired former Tony Blair spin-doctor Anji Hunter at a reputed £180,000 a year. The company says it has to compete for management knowhow in the US market where the company does 40 per cent of its business, and executive pay is much higher than in the UK.

? David Arculus, one of Labour's leading supporters in the City was today named as the Government's new red tape czar. He replaces Lord Haskins as unpaid chairman of the Better Regulation Taskforce.