BG Boss's 'Golden Hello' Revised

Oil and gas exploration firm BG has sidestepped a potential revolt over a £15 million golden hello'' for its new boss by announcing a revised package in the face of shareholder opposition.

The FTSE 100 group has cancelled an initial shares award for Helge Lund worth up to £12 million and replaced it with an award worth up to £10.6 million under a separate long-term bonus plan with more stringent performance criteria.

BG said it would mean the expected value on award of this part of the golden hello'' is cut from around £10 million to £4.7 million.

It also means there will be no need for a planned shareholder vote set for December 15, as the changes mean the award falls within the company remuneration policy approved earlier this year.

But the total golden hello'' for Mr Lund - including a £480,000 relocation package and shares worth up to #3 million to compensate for unvested bonuses - will still amount to a maximum of around £14 million.

He will also still receive an annual package of up to £14 million a year including an annual salary of £1.5 million plus payment in lieu of pensions, annual bonus, and a yearly long-term share award.

The changes come after a chorus of discontent from investment advisory bodies over the initial package, with the Institute of Directors (IoD) saying it brings the whole of British business into disrepute''.

Mr Lund is due to take over as BG chief executive in March after 10 years running Norwegian energy giant Statoil.

BG said: Mr Lund is an exceptional candidate, with the necessary skills and experience to lead BG Group and it is clear from the extensive consultation with shareholders over the past few weeks that this view is widely shared.

However, a significant number of shareholders questioned the structure of the package, in particular whether it was appropriate to go outside the remuneration policy approved by shareholders earlier this year.''

It said the board and Mr Lund wished to respond to shareholder concerns''. He has waived his right not to join the company should the initially-planned share award not be voted through. Shares fell by as much as 4% though later pared back some of the losses.

IoD director general Simon Walker said his group welcomed the revisions to BG's proposed remuneration.

He said: Mr Lund's pay now conforms with the policy guidelines agreed by shareholders in May and is subject to quantifiable performance targets.

While substantial, the total remuneration is reduced and now falls within proper limits for a company of BG's size and international importance.''

Legal and General Investment Management, representing 3.3% of BG shares, also welcomed the move.

Director of corporate governance Sacha Sadan said: We are encouraged to see BG responding positively to shareholders' concerns.

As long-term engaged investors, we look forward to the new CEO joining and creating shareholder value for all.''

Mr Lund's appointment follows the departure of Chris Finlayson as BG chief executive earlier this year, just 18 months into the job.

Mr Finlayson quit in April citing personal reasons, in the wake of production targets being slashed due to continued problems in Egypt. Chairman Andrew Gould has taken the helm on an interim basis.

Last month BG reported a 29% fall in third-quarter earnings to £759 million.

Shares have fallen by more than a quarter in the last year. The company was created in 1997 when British Gas demerged into two separately-listed companies, with Centrica having responsibility for the retail side of the business.