Lord Browne of Madingley, the chief executive of BP, is to receive an exceptional award of BP shares after his retirement this July.

The reward, which could be as much as two million shares — yesterday worth £10 million, is in addition to his entitlement to contractual severance pay and an ex-gratia end of service payment. They provide the retiring BP chief with a leaving package worth more than £5 million.

The extraordinary award, which follows a year in which the company was heavily criticised over safety after a series of industrial accidents, was made under BP’s long-term performance plan. It relates to the company’s performance from 2007 to 2009, even though Lord Browne is leaving the company six months into the three-year period.

The shares were vested yesterday and a BP spokesman confirmed that beneficiaries were normally required to be employed during the full year in which the shares are vested. In this case, Lord Browne will be employed for just six months. “They are using their discretion,” the spokesman said.

BP’s annual report, published yesterday, said that the remuneration committee judged Lord Browne’s entitlement to performance shares on “long-term leadership measures”.

The report said: “These focus on sustaining BP’s financial, strategic and organisational health. They include, among other measures, maintenance of BP’s performance culture and the continued development of BP’s business strategy, executive talent and internal organisation.”

In his last letter to shareholders, Lord Browne addressed the issue of safety after the March 2005 explosion at the Texas City refinery that killed 15 workers.

He noted that in 2006 there were seven fatalities at BP. “Every death is a tragedy but we should recognise that this number has reduced significantly, to the lowest level in nearly 20 years of reporting. I am particularly pleased with the large drop in driving-related fatalities, from 14 in 2003 to two in 2006,” Lord Browne wrote.

BP’s travails last year affected the earnings of its top executives. The troubles — which included lawsuits, criticism from the Chemical Safety Board and the Baker Panel report into its US refineries, as well as an investigation into alleged manipulation of the US propane market — halved Lord Browne’s bonus, which fell from £1.75 million to £900,000.

As a result, his total pay for 2006 fell from £3.3 million to £2.5 million. In addition, he received £2 million in shares from the 2004 to 2006 long-term performance plan.

Lord Browne is entitled to a pension worth £1 million annually from an accumulated pension fund worth some £22 million. However, he will also receive a lump-sum severance payment for termination of his contract, worth £3.7 million, representing salary, a bonus of 130 per cent and fringe benefits.

However, the severance payment will be scaled back if Lord Browne takes a job that pays one third or more of the severance amount.

The retiring BP chief will get an ex-gratia payment of a year’s salary, the last BP chief to receive such a gift. The remuneration committee has decided to end the practice.

Safety count

— March 23, 2005 Explosion at BP’s Texas City refinery kills 15

— July 28 Fire at Texas City

— August 10 Incident involving hydrometer at Texas City

— August 17 US Chemical Safety and Hazard Investigation Board issues urgent recommendation to BP to form independent safety panel “to assess and report on the effectiveness of corporate oversight of safety management systems at its refineries and its corporate safety culture”

— October 24 Independent safety review panel announced, with the aim of reaching conclusions that would affect the industry worldwide

— October 27 Chemical Safety Board issues preliminary findings on Texas City accident

— November 10 First meeting of independent safety panel

— December 9 BP issues final report on explosion, says it will invest $1 billion at Texas City

— January 16, 2007 BP US Refineries Safety Review Panel, led by James Baker, criticises the company’s management for failing to establish process safety as a core value at its five American refineries

— January 18 E-mails show that senior managers at Texas City told staff to put cost savings ahead of equipment that could have saved the lives of the 15 people killed

— February 6 BP cuts its oil production forecast and warns that safety concerns will force it to slow the pace of growth

— February 9 Texas Appeals Court rules that lawyers representing those injured in the Texas refinery explosion can question Lord Browne in person

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