Shareholders of U.K. oil giant BP PLC (BP) should vote against the reelection of Chairman Peter Sutherland due to his actions as a non-executive director at the troubled Royal Bank of Scotland Group PLC (RBS), investor advisory group PIRC said Tuesday.

"In our opinion, his actions as a non-executive director of Royal Bank of Scotland and as a member of its remuneration committee, bring into question his suitability as BP's chairman," PIRC said.

The non-executive directors of RBS have been criticized for allowing the bank to undertake a risky expansion strategy that has been blamed for its recent downfall. Those on the remuneration committee have been even more strongly criticized for allowing former Chief Executive Fred Goodwin to walk away with a GBP693,000 annual pension.

The bank is now majority owned by the U.K. government after it was forced to inject billions of pounds to keep it afloat.

Sutherland isn't the first BP board member to come under fire for connections to RBS. Last week, former RBS Chairman Tom McKillop said he won't be seeking reelection as a BP non-executive director after some shareholders voiced opposition.

PIRC also advised BP shareholders to vote down the remuneration report because the company hasn't justified the most recent salary increase of its executives. BP Chief Executive Tony Hayward's total remuneration in 2008 rose 17% to GBP2.5 million.

He also received shares valued at GBP336,000 in a long-term incentive scheme, despite the fact that the company's performance ranked at the bottom of its peer group. Under the rules of the scheme, BP directors should have been awarded no shares this year, as they were in 2007, but the committee used its discretion to award 15% of the potential maximum number of shares.

Sutherland has been a good chairman and shouldn't be tarnished by his role at RBS, said ING analyst Jason Kenney.

Concerns about excessive pay for BP directors also aren't justified considering Frank Chapman, chief executive of smaller U.K. oil and gas firm BG Group (BG.LN), was paid GBP11.3 million in 2008, compared with the GBP2.8 million received by BP's Chief Executive Tony Hayward, Kenney said.

Sutherland was due to retire as BP's chairman this month, but agreed to extend his term because the company has failed to find a replacement. Former Rio Tinto PLC (RTP) Chairman Paul Skinner was the favorite to replace Sutherland, but was ruled out after he had to extend his term at the mining giant to help settle a controversial deal with Chinese aluminum company Chinalco.

At 1143 GMT, BP shares were down 1.77% or 8 pence, at 445 pence in a weaker market.

-By Steve McGrath and James Herron, Dow Jones Newswires; 44-20-7842-9284; steve.mcgrath@dowjones.com