What do you think the CEO of BP would receive as a pay raise if his company was flush with profits, after a record or near record year? I ask that question because CEO Bob Dudley was awarded a 20 percent pay raise when, as noted by Houston Chronicle business columnist Chris Tomlinson, he has managed the “company through a dramatic drop in share price,” and has laid “off thousands of employees and endangered the company’s dividend.”

This was done in the face of a company-wide ban on salary increases and a near shareholder revolt over the pay raise, with 59 percent of company shareholders voting against the pay raise. BP Board Chairman, Carl-Henric Svanberg’s comment to BP shareholders after their vote was about as stark as it could be. He stated, “Let me be clear. We hear you.” (Fill in duh?; say what?; huh?; or a more colorful adjective(s) here.)

How does this affect your FCPA or other anti-bribery corruption program? Top management sets the tone for any organization. Brooke Masters, writing in the Financial Times said that BP “argues that Mr. Dudley met all his operational targets and should not be blamed for falling oil prices, or a $9.8 billion charge to settle claims related to the 2010 Gulf of Mexico oil spill.” It does make you wonder what a CEO should be judged on? Yet in the face of the worst energy crisis since the 1980s and having laid off literally thousands of employees, the BP Board chose to boost Dudley’s bonus by 40 percent over the previous year and double the company’s payment to his retirement fund.

What type of message does that send to employees? Do a crap job and you will be rewarded? How about: It really does not matter what you do, just make your targets, because that is the only way to be rewarded. For if that is the message in this economic downturn for energy, it will not  be long before employees begin to think that cutting corners in compliance is acceptable. It is a sorry spectacle all the way around. 

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