(Bloomberg News) BP Plc, whose share price has dropped 29% since last year's Gulf of Mexico oil spill, will face opposition from two of the U.S.'s largest pension funds at the company's annual general meeting tomorrow.

The $225 billion California Public Employees' Retirement System, which holds about $450 million in BP shares, will vote against approving the company's annual report, according to a proxy vote posted on its website. Florida State Board of Administration, which manages more than $100 billion of securities, will also vote no, according to its website.

Chief Executive Officer Robert Dudley is facing anger from investors over the company's handling of the largest U.S. oil spill. He will also face questions about the $7.8 billion share swap with OAO Rosneft that BP's billionaire partners at TNK-BP blocked in court. The swap agreement expires tomorrow.

"It will be a contentious AGM," said Ivor Pether, who oversees about $12 billion of U.K. securities, including BP shares, at Royal London Asset Management. "They'll have to reach out to dissenting shareholders and listen to their concerns."

Christian Brothers Investment Services Inc. will also oppose the annual report, one of 23 proposals that shareholders will vote on in the first shareholder meeting since the Gulf blowout that killed 11 workers. CBIS, Calpers and the Florida fund will also vote against the re-election to the board of William Castell, head of the safety, ethics and environment assurance committee.

'Wake-Up Call'

"If we can get the abstentions and against votes in the 25% range, that would be a huge wake-up call to the company," said Julie Tanner, a spokeswoman for CBIS. "It raises concerns when they go ahead and do deals like Rosneft."

AAR Group, which represents BP's Russian partners, went to court to stop the swap and exploration agreement with Rosneft, arguing that it violated the agreement that BP would pursue all its operations in Russia through TNK-BP. The Russian venture accounts for a quarter of BP's production and a fifth of its reserves.

BP may consider purchasing the half of TNK-BP it doesn't already own, worth as much as $27 billion according to Barclays Capital, to rescue the Rosneft deal. Dudley may also seek to extend the deadline for completing it. Russian Deputy Prime Minister Igor Sechin, who orchestrated the deal with Dudley, resigned this week as chairman of Rosneft on orders from President Dmitry Medvedev.

Next Step

"I wonder what the next step is for BP if this deal falls apart," said RLAM's Pether. "The vision laid out by Dudley was to dispose of non-core assets at high valuations, leaving a company that is somewhat smaller but with higher growth potential. It's not clear that is what is materializing."

BP has sold more than $24 billion in assets since the Gulf spill to focus on higher-growth projects after taking a $41 billion provision for cleanup and legal costs. It suspended the $10 billion annual dividend for the first three quarters of 2010 to help shore up its balance sheet.

Pension Investment Research Consultants Ltd., a U.K.-based adviser to investors that doesn't own shares, said that shareholders should reject the annual report because the company didn't allow for a vote on reinstating the dividend at 7 cents a share in the fourth quarter, half the level before the spill.

Hayward, Inglis

PIRC also opposes the pay given to Tony Hayward, who stepped down as CEO in October, and Andy Inglis, the former head of exploration and production. They were treated as "good leavers" by keeping an interest in shares that could be worth more than 6 million pounds ($10 million) each, PIRC said.

While most BP executives, including Dudley, received no bonus for last year, Iain Conn, the head of refining and marketing, and Chief Financial Officer Byron Grote each got 30% of their maximum payout.

Pay packages should have been "more moderate" in light of the spill, Norway's KLP Bank spokeswoman Jeanett Bergan said. Objections to executive pay may be the loudest at an international oil company since Royal Dutch Shell Plc shareholders rejected bonuses paid to executives in 2009 even after performance targets weren't met.

"They'll really be going for blood," said Christine Tiscareno, an equity analyst at Standard & Poor's in London. "It could be the most ineffective meeting for a while."