Could BP CEO Bob Dudley’s 40% Pay Cut Foreshadow Wider Public Salary Scrutiny?

Managing businesses when times are tough can be almost as difficult as leading in the good times. Some would argue it’s even tougher: recession-time managers often don’t get the glory of overseeing record profits and stellar share-price jumps—and may even have to make colleagues redundant and navigate a business through bankruptcy.

Just try telling that to Bob Dudley.

The broader economy, of course, isn’t in recession. But the oil industry has been weathering one of the worst periods in its history, hurting profits and making CEO pay especially vulnerable amid a wider societal backlash against the establishment.

The BP CEO doesn’t appear to have done a particularly brilliant or terrible job at the British oil giant, as he tries to rebuild its reputation, and its finances, in the wake of the Deepwater Horizon disaster that toppled his predecessor. Its shares have broadly tracked sideways in the past five years along with the shares of Shell, Exxon and Chevron, though Shell CEO Ben van Beurden has managed to pull of a risky, albeit potentially company-transforming acquisition of BG Group.

A long string of quarterly losses at BP prompted almost two-thirds of the company’s shareholders to last year vote against Dudley’s pay package, indicating that even some large, sophisticated investors weren’t impressed. That vote was non-binding, but this year the board decided to heed investor concerns and slash his total remuneration by 40% to $11.6 million.

The cut came after the board revamped BP’s remuneration policy with measures that included cutting his bonus payments by a quarter and reducing the size of his long-term incentive payout. “I have consulted widely with shareholders and listened to and sought to act on their concerns, and have been sensitive to developments in the society in which we work,” Ann Dowling, chair of BP’s remuneration committee, said in the company’s annual report published yesterday.

The move comes as British companies face new rules that give shareholders a binding vote on their pay policies at least once every three years. The rules were introduced in 2013, so many companies are facing their first binding vote this year.

Outside Britain, there are other signs of large companies trimming payouts. Canada’s Bombardier this week delayed the payment of some executive bonuses after the aircraft manufacturer suffered a public backlash for lifting their pay while the company was cutting jobs and receiving government aid. “I understand the anger,” CEO Alain Bellemare said. “We disappointed people. We should have talked to the entire population more quickly.”

Donald Trump has so far given little indication that he’ll regulate executive pay, though BlackRock, the world’s largest fund manager, recently wrote to hundreds of CEOs in Britain and America asking them to rein in “excessive” remuneration and improve staff training and development programs or face potential dissenting votes at shareholder meetings.

And this morning, it was revealed that the head of the world’s biggest sovereign wealth fund, which owns an average of 1.3% of every listed company in the world, is calling for a major overhaul of executive pay practices.

“Over time, we expect long-term incentive plans to be gradually phased out, particularly with regards to the recruitment of new chief executives,” Yngve Slyngstad, the head of Norway’s oil fund, told the Financial Times. Later this morning, Slyngstad welcomed news of Dudley’s pack cut at BP.

To be sure, average CEO pay at America’s 104 largest companies rose by 6.4% last year, buoyed by a rising stock market, according to an analysis by The Wall Street Journal—iindicating there haven’t been any major paradigm shifts just yet.