BP (BP.L) cut over $40 million in remuneration from former CEO Bernard Looney after the British oil giant concluded he had knowingly misled the board over personal relationships with colleagues.
BP’s board dismissed Looney without notice effective Dec. 13 for serious misconduct and said in a statement on Wednesday he would receive no further salary or benefits from the dismissal date, and would not be paid an annual bonus for fiscal 2023.
The dismissal cuts short Looney’s 12-month notice period after he resigned in September for failing to fully disclose details of past personal relationships with colleagues.
Looney’s abrupt departure, after less then four years at the helm, threw the company into turmoil. The board is still seeking his replacement.
BP said Looney’s remuneration package was cut by 32.4 million pounds ($40.53 million), with 87% of that due to his resignation on Sept. 12, 10% as a result of the board’s decision to dismiss Looney for serious misconduct, and a further 3% was clawed back at the discretion of the board.
“I am disappointed with the way this situation has been handled,” Looney said in a statement on Wednesday.
Chairman Helge Lund is leading an investigation with the help of law firm Fairfields into Looney’s undisclosed relationships to determine whether they breached company rules, company sources told Reuters earlier this month.
CLAWBACK
The majority of the value, nearly 25 million pounds, was linked to Looney losing unvested share awards between 2021 and 2025.
Looney will also be required to repay 50% of the cash portion of his 2022 cash bonus, around 420,000 pounds.
Looney’s resignation came after the board investigated similar allegations against him in May 2022, following which Looney gave the board assurances over his past and future conduct.
“Following careful consideration, the board has concluded that, in providing inaccurate and incomplete assurances in July 2022, Mr Looney knowingly misled the board,” BP said in a statement on Wednesday.
Looney’s pay package reached around $12 million in 2022 after surging energy prices generated record profits for oil and gas companies.
Following Looney’s resignation, BP named Murray Auchincloss, who headed finances under Looney, as interim CEO.
The board is expected to decide on a permanent CEO in the first quarter of 2024, sources told Reuters earlier this month.
Other boards at top corporations have cut executive pay in the past over misconduct.
Wells Fargo stripped chief executive John Stumpf of $41 million in stock awards in 2016 after a sales practices scandal.
Two years ago, McDonald’s former CEO Steve Easterbrook agreed to return compensation worth $105 million in equity awards and cash to settle a lawsuit over alleged lies about affairs.
($1 = 0.7983 pounds)
