BP $BP failed to win majority approval for two board-backed resolutions at its annual general meeting, in a rebuke over climate transparency that cast a shadow over the debut appearance of the company's new leadership.
Voting results showed each of the two resolutions fell at roughly the 47% mark — nowhere near the 75% threshold that special resolutions must clear to be adopted, according to Bloomberg. One resolution concerned the right to hold virtual-only AGMs; the other sought to retire two existing shareholder-approved requirements for company-specific climate disclosures.
"While we appear to have overwhelming support for the direction of travel for the company, it seems very clear that the two special resolutions — one relating to our articles and one relating to historic resolutions — have not reached a simple majority," BP chair Albert Manifold told investors at the meeting.
With 81.8% of shareholders voting to elect Manifold, who assumed the chair in October, the tally fell well below the near-unanimous approval that board nominees customarily receive. Among those signaling opposition ahead of the meeting, Legal & General Investment Management — a top-10 BP shareholder — announced plans to vote against Manifold's election, and Glass Lewis issued a recommendation to do the same, pointing to the board's move to exclude the Follow This resolution as the basis for its view. ISS and Norway's sovereign wealth fund, which manages roughly $2.2 trillion in assets, each came out in favor of retaining Manifold.
At issue was a Follow This proposal that sought information from BP on how its business strategy holds up if demand for oil and gas were to fall over time. Speaking at the AGM, Manifold contended that the Follow This submission failed to meet legal requirements, leaving the company with no option but to leave it off the ballot. "If you don't submit a resolution in compliance with the rules, we are legally bound not to accept it," he told investors, according to Bloomberg.
Follow This founder Mark van Baal described the resolution results as "extremely embarrassing" for BP, according to CNBC.
A resolution brought by climate group ACCR, which pressed BP to demonstrate that its spending approach on oil and gas serves shareholder interests, garnered 25.9% support — an outcome that triggers a requirement for BP to engage with investors on the matter and provide a subsequent update. The vote signaled deep investor frustration, according to ACCR's oil and gas strategy lead Nick Mazan, who called the outcome "unprecedented and demonstrates that investors are fed up with BP's lack of capital discipline and its approach to shareholder rights."
Thursday was the first AGM for both Manifold and O’Neill, who became CEO at the start of April. The meeting took place as BP shifted its strategy, moving more investment into oil and gas and away from low-carbon projects. O’Neill said that keeping a strong balance sheet and spending carefully are now top priorities.
"All of the board's decisions relating to the resolutions at this year's AGM were made in good conscience, made with an aim to build a more valuable BP for our shareholders," Manifold said in a statement.