Oil major BP has slashed CEO Bob Dudley’s pay packet by 40 per cent for 2016 and cut the amount that he can pocket in future, in response to shareholder protest.

BP said on Thursday that Mr Dudley’s total pay for 2016 would be $11.4m, down from the $19.4m he got for 2015.

Last year, the company sparked outrage when it awarded Mr Dudley a 20 per cent pay increase for 2015 despite BP chalking up a record annual loss and slashing jobs.

Almost two thirds of BP shareholders voted against that award in April 2016, but the vote was non-binding.

Under a new policy proposed by BP in its latest annual report, there would be a clearer link “between the delivery of BP’s strategy, outcomes for shareholders and pay”, it said.

“I believe that the board has responded positively to the events of 2016 and has taken significant action,” said Professor Dame Ann Dowling, chair of the remuneration committee.

Royal London Asset Management, which holds a 0.7 per cent stake in BP worth around £679m, welcomed the move.

“We applaud the BP remuneration committee for being proactive in responding to the shareholder revolt last year and see this as a milestone in the engagement between companies and shareholders," said Ashley Hamilton Claxton, corporate governance manager at the group.

"In particular, the committee applied discretion to override the formulaic outcome of the pay policy, which is a welcome step in the right direction.”

Analysis by the Equality Trust published last month showed that bosses of the UK’s biggest 100 companies now take home an average of £5.3m each year, which is 386 times more than what a worker earning the national living wage pockets.

That report showed that over two thirds of FTSE 100 CEOs are paid more than 100 times the average UK salary, and ninety per cent of them are paid at least 100 times more than the national living wage.

Citing the latest figures available at the time, the Equality Trust said that Mr Dudley’s pay was the fifth highest in the FTSE 100.

The world’s most valuable brands Show all 10 1 /10 The world’s most valuable brands The world’s most valuable brands 1st - Google Google replaced Apple as the world’s most valuable brand, with a brand value of $109.5bn, according to Brand Finance The world’s most valuable brands 2nd - Apple Apple’s brand value declined from $145.9bn to $107.1bn in 2016 The world’s most valuable brands 3rd - Amazon Amazon's brand value rose from $69.6bn to $106.4bn in 2016 Amazon The world’s most valuable brands 4th - At&t Of the 40 telecoms brands in the ranking, AT&T in 2016 overtook Verizon as the most valuable brand rising to $87bn from $59.9bn the year before The world’s most valuable brands 5th - Microsoft Microsoft's brand value rose marginally from $67.3bn to $76.3bn in 2016 The world’s most valuable brands 6th - Samsung Amazon's brand value rose from $58.6bn to $66.2bn The world’s most valuable brands 7th - Verizon Verizon's brand value inched up from $63.1bn to $65.9bn The world’s most valuable brands 8th - Walmart Walmart's brand value rose from $53.6bn to $62.5bn The world’s most valuable brands 9th - Facebook Facebook's brand value increased sharply from $34bn to just shy of $62bn The world’s most valuable brands 10th - ICBC ICBC saw its brand value rise to $47.8bn from $36.3bn. It was the most valuabe financial brand in the world in 2016 replacing Wells Fargo

Martin Sorrell, chief executive of advertising giant WPP, topped the list. Other companies that made the top ten included Reckitt Benckiser, Sky, Shire, Prudential, RELX, Standard Chartered, Schroders and Lloyds Banking.