Image copyright PA Image caption Bob Dudley took over as BP chief executive in the aftermath of the fatal Gulf of Mexico oil rig explosion

BP shareholders have rejected a pay package of almost £14m for chief executive Bob Dudley at the oil company's annual general meeting.

Just over 59% of investors rejected Mr Dudley's 20% increase, one of the largest rejections to date of a corporate pay deal in the UK.

The vote is non-binding on BP, but earlier, chairman Carl-Henric Svanberg promised to review future pay terms.

Mr Dudley received the rise despite BP's falling profits and job cuts.

Corporate governance adviser Manifest says the vote is at or above the fifth-largest in the UK against a boardroom remuneration deal.

'Last chance saloon'

In his opening address to the shareholders' meeting, before the vote had been formally announced, Mr Svanberg acknowledged the strength of feeling, saying: "Let me be clear. We hear you."

He continued: "We will sit down with our largest shareholders to make sure we understand their concerns and return to seek your support for a renewed policy."

"We know already from the proxies received and conversations with our institutional investors that there is real concern over the directors' pay in this challenging year for our shareholders.

"On remuneration, the shareholders' reactions are very strong. They are seeking change in the way we should approach this in the future," he said.

The Institute of Directors said the shareholder rebellion would "determine the future of corporate governance in the UK".

"British boards are now in the last chance saloon, if the will of shareholders in cases like this is ignored, it will only be a matter of time before the government introduces tougher regulations on executive pay," said director general Simon Walker.

Media playback is unsupported on your device Media caption Dudley's pay sends 'wrong message' investor says

'Out of touch'

Shareholders that criticised the pay deals included Aberdeen Asset Management and Royal London Asset Management.

Investor group Sharesoc branded the pay deal "simply too high", while Glass Lewis, ShareSoc, Pirc and Institutional Shareholder Services have also expressed their opposition.

Earlier on Thursday, Ashley Hamilton Claxton, corporate governance manager at Royal London, told the BBC: "The executives received the maximum bonuses possible in a year when [BP] made a record loss, and to us that just does not translate into very good decision-making by the board.

"We think it sends the wrong message. It shows that the board is out of touch."

She told the BBC's Today programme that if 20%-25% of shareholders vote down the pay deal, it would force BP to "think long and hard about their decision".

The early voting figures suggest that the opposition is even bigger that she expected.

Image copyright Getty Images Image caption The Deepwater Horizon disaster forced BP to sell billions of dollars in assets to cover costs and compensation

Analysis: Simon Jack, BBC business editor

Giving someone a 20% pay rise for a year's work that saw BP record its biggest ever operating loss seems perverse even by chief executive pay standards.

If it's any consolation, (I doubt it will be), bosses at Exxon and Chevron got paid even more than Bob Dudley even though the value of their companies fell by more than BP. That's the bit that sticks in the craw for many. Under what circumstances don't these guys get paid a fortune? It would be fine if some years you win, some years you lose - but they never seem to lose.

We may get a rebellion of 20-30% of shareholders today but even if it was more than 50%, the board doesn't have to listen. Shareholders do have a binding vote every three years on the pay policy and formula. No use crying now, the formula that spat out £14m for Bob Dudley was approved in 2014 by 96% of shareholders.

Read Simon's full blog here.

BP's pay policy is subject to a binding shareholder vote every three years. It was last set in 2014, meaning new proposals are due to be put forward for shareholder approval again in 2017.

'Surpassed expectations'

Many experts argue that Mr Dudley is merely earning the market rate for international executives.

Mark Freebairn, partner at recruitment firm Odgers Berndtson, told Today: "If Bob Dudley was to leave [BP] it would be for a competitive company and remuneration would be part of the discussion. If you operate in a global market, you have to operate on a global scale."

BP was now in a far better position than when Mr Dudley took the helm, he said.

After the Gulf of Mexico oil disaster, BP's share price collapsed and it was forced to sell off assets worth billions of pounds to pay costs, fines and compensation.

However, the collapse in the oil price over the past 18 months saw BP's profit tumble, and the company is axing another 3,000 jobs worldwide on top of the 4,000 cuts already announced.

A spokesman for BP said before the meeting at London's ExCel centre had begun that shareholders had previously backed the pay formula.

"Despite the very challenging environment, BP's safety and operating performance was excellent throughout 2015... BP's performance surpassed the board's expectations on almost all of the measures that determine remuneration - and the outcome therefore reflects this.

"And these clear measures derive directly from BP's remuneration policy which was approved by shareholders at the 2014 AGM with over 96% of the vote," the spokesman said.

Mr Dudley's pay package was less than that earned by some rivals in the oil and gas industry, including at Exxon and Chevron. But it was more than the award for Ben van Beurden, chief executive at Royal Dutch Shell, whose salary package fell from €24.2m (£19m) in 2014 to €5.58m last year.

Experts point out, though, that it can be difficult to compare like-with-like. For instance, Mr van Beurden's 2014 pay involved one-off pension payments and "tax equalisation" measures when he moved from the UK to the Netherlands.

And in 2015 Mr Dudley and Mr van Beurden received very different rewards under their long-term incentive plans, LTIPs. Shell gave its chief executive 8% of the LTIP, down from 49% in 2014. Mr Dudley's long-term bonus increased from 63.8% of maximum to 77.6%.