BP Claws Back $40 Mln In Pay From Former CEO Citing Serious Misconduct

BP Plc said it has forfeited a maximum of 32.43 million pounds or $40.59 million in potential remuneration from former CEO Bernard Looney after the British energy major determined that he knowingly misled the board regarding his personal relationships with colleagues.

In a statement, BP said that Looney has been dismissed without notice effective on December 13, and that he will not receive any further salary, pension allowance or benefits from the date of his dismissal. He will also not be paid any annual bonus in respect of the financial year 2023.

BP said, “Following careful consideration, the board has concluded that, in providing inaccurate and incomplete assurances in July 2022, Mr Looney knowingly misled the board. The board has determined that this amounts to serious misconduct…. This decision had the effect of bringing Mr Looney’s 12 month notice period to an immediate end.”

It was in mid September that BP announced the resignation of Looney with immediate effect over allegations about personal relationships with company colleagues.

In 2022, the board had sought assurances regarding disclosure of his past personal relationships with colleagues and his future behaviour, to which Looney gave these assurances in July 2022.

Looney then disclosed a small number of historical relationships with colleagues prior to becoming CEO. But the company had not found any breach of code of conduct then.

In his September 2023 notification to the company, Looney informed that he had not been fully transparent in those assurances. Following this, BP had launched a probe on the allegations related to Looney’s conduct.

BP now announced that as per the clawback in respect of the period from July 2022, Looney will be required to repay 50 percent of the cash portion of the annual bonus paid to him in respect of the financial year 2022; and he will forfeit 6/36ths of his award of shares that vested in August 2023 from the three-year 2020-2022 performance share plan under the Executive Directors’ Incentive Plan or EDIP.

The company noted that 87 percent of the total maximum value of 32.43 million pounds is automatically forfeited as a result of Looney’s resignation with immediate effect on September 12.

Further, 10 percent results from the board’s decision that he should be dismissed following serious misconduct and the further 3 percent has been clawed back at the discretion of the board.

Following his resignation in September, BP appointed its CFO, Murray Auchincloss, as interim chief executive, and Kate Thomson as its Interim Chief Financial Officer.

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