Oil giant BP has stoked the controversy over directors' pay by awarding chief executive Tony Hayward a 41% pay rise despite profits last year tumbling by 45%.

Hayward took home £4.01m in salary, bonus and share awards last year, up from £2.85m in 2008.

BP told reporters it was confident over the decision. "We are always in discussions with investors and we've clearly done a review and made changes to remuneration packages going forward," a spokesman for the remuneration committee said.

DeAnne Julius, the head of BP's remuneration committee, said in the company's annual report that the increase was to reward Hayward for boosting operational performance.

BP's new chairman, Carl-Henric Svanberg; Byron Grote, BP's chief financial officer: Andy Inglis, the head of exploration and production, and Iain Conn, the head of refining and marketing, also received large salary increments.

In 2009, BP's full year replacement cost profit eased 45% to $13.96bn from $25.59bn in 2008, largely as a result of weaker oil and gas prices and pressure on refining margins.

Unadjusted replacement cost profit in the fourth quarter was $3.45bn down from $4.98bn in the preceding quarter but up from $2.59bn in the final quarter of 2008.

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