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BP: Back from the brink

Robert Peston | 08:07 UK time, Tuesday, 27 July 2010

It is very difficult to describe a $17bn loss for three months of trading as a sparkling performance.

Tony Hayward in front of oil rigBut for BP it could have been a lot worse - in that its estimate of the cost of the Gulf of Mexico oil spill of $32.2bn was less than some analysts have feared BP would end up paying for the clear up, compensation to those damaged and fines - and that's because BP believes that it will not be found guilty of gross negligence in relation to the disaster.

That said, in an interview with me, the chairman Carl-Henric Svanberg said there was no 100% certainty the final bill for the spill wouldn't be higher.

BP will pay for all this by selling assets worth $30bn - which Mr Svanberg insisted would not eat into the core of the business.

He also praised the long record at BP of the outgoing chief executive Tony Hayward, while saying that Mr Hayward was not the right man to lead the rebuilding of the business.

He defended the financial settlement with Mr Hayward - under which Mr Hayward will receive a one-off payment of over £1m and a £600,000 pension for life from the age of 55 - as no more Mr Hayward's contractual due.

Update 1045: Probably the most important statement made by BP today is that it doesn't believe that it has been "grossly negligent" in relation to the oil disaster in the Gulf of Mexico and under the terms of the US Clean Water Act.

As I've mentioned before, its confidence that its culpability is less than some have feared stems from its recent success in capping the well: because there have not been further fractures of the well as internal pressure has risen, BP has a defence against the charge that it cut corners in the design of the well.

Now according to my calculations, if gross negligence were proved, it would pay almost $20bn in penalties under the Clean Water Act (that's a penalty of $4300 per spilled barrel at an estimated daily flow rate of 50,000 barrels for around 90 days).

By contrast, if BP is right and it hasn't been grossly negligent, then the penalty drops to just under $5bn (because the penalty in those circumstances would be $1,100 per barrel).

Now BP's loss of $17bn is based on a provision for that lower penalty. So it's no exaggeration to say that BP's financial rehabilitation rides to no small extent on its ability to prove that its negligence was not of the gross kind.

All that said, it's worth noting that under accounting rules BP has been forced to calculate its liability for the oil spill costs on the basis that it bears all of them.

In practice, it may be able to recover 35% of much of the cost from the well partners, Anadarko and Mitsui.

But just to look on the dark side again, BP's $32.2bn pre-tax charge for the spill includes no allowance for any fines or penalties other than those under the Clean Water Act - and given the sheer number of government bodies that are investigating BP, it may not be safe to assume (as BP concedes) that there will be no other fines or penalties.

Comments

Page 1 of 3

  • Comment number 1.

    So, back on the "gosh, he's got a big pension" argument again! Why can we not just accept that some can and have negotiated themselves better employment terms than others? Is it jealousy?

  • Comment number 2.

    And as for Mr Svanberg was it impolite to ask challenging questions about his role (absence of role)? Remind me just what should a Chairman of one of the world's biggest companies be doing when that company is responsible for one of the world's biggest disasters. Should not the chairman be the public face of the organisation they chair?

    As for Mr Hayward his diamond encrusted departure (with optional reincarnation in Russia) simply reflects the enormous remuneration packages the elite of CE's receive and which should be the focus of governments and subject to the mandatory/statutory governance of our major corporations. Departure by mutual agreement before there is any resolution of culpability on his part e.g. failure to assure sound management systems and administration and not be too exercised on who left the tap on!

  • Comment number 3.

    @psopod:
    I'll tell you why we cannot accept that 'some can and have negotiated themselves better employment terms than others'. It's not about employment terms, it's about a scandalous lack of management and about not doing the job. It's about greed and stupidity. 'Is it jealousy?' No, it's obscenity! Does anybody seriously think that the huge damage caused by BP in the Gulf of Mexico will just go away because a few people say 'sorry'? This is why some wealthy people are criticised: their wealth is based on taking things away from others, in this case, from all those living on the Gulf of Mexico. That's where Mr Hayward's pension and pay-off come from.

  • Comment number 4.

    Robert, I think you should apologise for your misleading report yesterday : "Hayward to receive immediate £600,000 a year pension". As many comments on your blog pointed out, in general pensions before 55 are no longer permitted by the UK government. I assumed there was some underhand deal or fiddle taking place.
    This is clearly a standard occupational pension deal - no real story. Seems you made a mistake - is this a resigning issue (with or without pension?)

  • Comment number 5.

    #1

    Big pension? £50k is a big pension... £600k is a ridiculously huge pension and certainly considerably bigger than the pensions most of the pension funds that depend on BP dividends will ever pay out.

  • Comment number 6.

    Er, the wealth of those in the US Gulf states is based on their ability to drive internal combustion engines that run on, yep, oil products. And describing the loss as a 'trading' one is a sensationalist interpretation of accounting - as is describing BP as 'back from the brink'. and, psopod, you are spot on - there is innate jealousy of someone who has spent 28 years working for one business earning, by international oil industry standards, a relatively modest salary. Note of course the tax he would be paying which is conveniently forgotten

  • Comment number 7.

    One Point I would make is that drilling at the depths Deep water horizon was drilling at is largely very new technology, and perhaps we should not be surprised if accidents occur. Our civilizations thirst for energy has always resulted in accidents: Coal mining has had its accidents, and its negative environmental impact. Until some brilliant scientist comes up with an alternative clean energy source there must be an impact on the environment.
    Regrettably Mr Haywood was in a position where a sacrifice had to be made, and Mr Haywood was that sacrifice. It appears he did not understand culture in the USA very well.

  • Comment number 8.

    I suppose that it is more to do with incompetent yet highly paid managers getting huge pensions for life, while pensioners who own and depend on the organisation for their livelihoods make huge losses.

  • Comment number 9.

    @ 1. At 08:56am on 27 Jul 2010, psopod wrote:

    > So, back on the "gosh, he's got a big pension" argument again! Why can
    > we not just accept that some can and have negotiated themselves
    > better employment terms than others? Is it jealousy?

    No - it's common sense. Those who would take us back to the days of "pyramid societies" are living in the past. This is not some tin-pot society like ancient Egypt, psopod!! Try to get up to date.

    Look, the credit crunch changed everything once and for all - we can't reward abject failure, and high wages compensation causes inflation and excess consumption. It's all got to be cut.

  • Comment number 10.

    Blimey! Members of the wealthy elite awarding themselves big salaries and fat pension pots - gosh what a surprise! When are we going to wake up to the 'realitiies' of life under capitalism? I sometimes wonder whether people live in some sort of fantasy country where things are fair and everyone is rewarded according to merit and hence the shock when they see such naked 'abuse'. Get real. That IS how capitalism operates. Except for occasional examples, the wealthy, by and large, build the world for themselves, grab what they can and keep it. If you support capitalism you support that notion. If you don't like it - change it, don't vote for it!

  • Comment number 11.

    I'm a BP shareholder. That means I'm one of the owners of the company. Which gives me a right to comment on Tony Hayward's pension. Unlike the moaners who will no doubt be throwing hissy fits about it.

    Tony Hayward is welcome to his pension, the tiny tiny proportion of my dividends which go towards it is nothing compared to the wealth he has created within BP.

    I wish he had stayed at BP. In the fullness of time I expect that we will find the blame does not land anyway near as squarely with BP as Obama et al would like.

    Still, as an owner of the company I get to say. And his pension is fine by me. But no doubt lots of other people who haven't chosen to invest their money will feel they have the right to complain about his pension.

  • Comment number 12.

    Before we all start gushing uncontrollably - and thanking the lord that BP have been 'saved' - lets not forget the damage caused to the environment and the unmeasurable cost to wildlife.

    After hearing the interview on Radio4 this morning, I missed the beginning, but essentially it was someone who knows the oil industry admitting that some oil companies refuse to move from fossil fuels - they claim it's what they do best so they will stick at it.

    The banal claim seems to be that they need a 50 'plan' in order to move away from fossil fuels - fair enough - but what have you been doing for the last 50 years!

    It's not like this is a new problem, but just as I have stated all along - the profits of the corporations are put before the needs and wants of the people.
    Profit is the driver - not common sense, not rationality, not intelligent thinking - pure and basic profit - "what can I get out of this deal" and not "how will this deal benefit humanity"

    They make me physically sick - abusing the irrationality of the consumer which is boosted by the manipulation of the human mind through marketing and advertising (or didn't you know why the corporations have huge budgets to spend on telling us how good they are for us and their 'green' credentials)

    Still - as the man said this morning "Government taxes are unfair to shareholders".

    If we were on this planet to be 'fair to shareholders' then this world would be a scorched earth - barren of all resources by now.

    Fortunately this will not go on much longer - it's a bit coincidental we manage to break the 'biggest UK corporate loss ever' 2 years in a row...

    ....but then this is just a recession - right folks?

    I mean that's what we're being told isn't it? - everything under control is it? Nothing to see here.....move it along now...

  • Comment number 13.

    Yes indeed many will rant at yet another obscene pay-off! I work for a company that when negotiating pay for employees they talk in increments of 0.1%. This company's market worth is meagre @ £3.1 billion when compared to BP, heck our CEO annual pay is circa £1 - £1.2 million (No share options its family owned, can't guess @ pension?)but still obscene! Rant away fellow bloggers, no one hears you in cyber space, no one! But give a thought to those who lost their lives and loved ones from this disaster via BP, certainly the corporate bean counters will never comes close to the figures of Mr Hayward, then the thousands of individual members of public, environment etc the bean counters will be hard @ work thats whAT BP pays them for.............

  • Comment number 14.

    Ten tips for leading a better life

    1Stop stressing about the banks,there is nothing you can do to change things
    2 Remember life's not fair, s**t happens and get over it
    3 If you have any money spread it around as many banks as possible no more than £50k in any one account
    4 If you owe money pay it off as fast as you can afford
    5 Don't look on your home as an investment. It's a place for you and your family to live in. If it's value increases over time good luck to you.
    6 Cash is king.The more you have the better you will feel. But don't forget rule 3
    7 Pensions are a good thing to have but they are long term investments designed for 30-40 years. If you can afford it make sure you have one.
    8 Be good to your kids you may need them in the future.
    9 Any job is better than no job at all. Believe me I know.
    10 Enjoy life, it's probably the only one you'll have.




  • Comment number 15.

    #11

    You're not getting any dividends - remember?

    Most BP staff are also BP shareholders. Perhaps you should ask them what they think because the ones I know won't get a pension anything like the one Hayward will pick up and of course neither will the people whose businesses on the Gulf Coast he's destroyed.

    In fact he could cheerfully give half his pension away to them and still be better off than the vast majority in the UK.



  • Comment number 16.

    "In the fullness of time I expect that we will find the blame does not land anyway near as squarely with BP as Obama et al would like."

    I agree. How Halliburton and Transocean seem to have been absolved of responsibility is quite incredible.

  • Comment number 17.

    56. At 4:15pm on 26 Jul 2010, AndyC555 wrote (yesterday)

    "You are funny, you need to throw off your prejudices. And you ought to make your mind up. One post you're saying you wouldn't get a job because you didn't go to the right school, the next post you're saying you can get any job becuase of your ability."

    I can get any job because of my ability - however I would never be a CEO - unless I set up the company myself - is that so difficult to comprehend? Maybe you need to look at who's who in the CEO world and which schools they attended - and get back to me when you've done some proper research.

    "Happy with my lot? You bet I am. No chip on MY shoulder. Working class? Middle class? Much of it's a stae of mind. Try freeing yours up."

    Just because your 'free mind' has been convinced there is no class divide - doesn't mean it isn't true. You keep working hard and maybe one day you can have some ficticious wealth.....just until it's all taken away - or until you realise you're on an endless treadmill which means you'll be working until you're 75 - despite the wealth claim you have today.

    "As for BP, I hope YOU bought at £3 a share. Look at it now, £4.13 a share. Over 33% in little more than a month. Can't get that in the Co-Op savings club."

    I have lost count of the number of people who make these sorts of claims - Northern Rock, RBS and Lloyds - same people making the same "I'm so clever, I am going to make a profit" - and now they're all strangely quiet - vanished, never to be seen again.

    I have noted your £3 a share and I will get back to you in the future. I always make sure those who promote gambling as a profession are made to eat their words. Myself - well I don't gamble on shares - those of us who work in and fully understand the industry are aware of it being a rigged game which the little suckers provide the cash and enthusiasm and the big boys cynically clean up.

    Still - I don't want to spoil your fantasy - I can see you genuinely believe you're going to make profit from doing nothing - you really must be proud of yourself to achieve such greatness on the back of what is esssentially a cost to the environment.

  • Comment number 18.

    It's a shame that Mr Peston can not write, or indeed speak, in properly constructed sentences in the Queen's English.

  • Comment number 19.

    11. At 09:28am on 27 Jul 2010, NetherWallop wrote:

    "Tony Hayward is welcome to his pension, the tiny tiny proportion of my dividends which go towards it is nothing compared to the wealth he has created within BP."

    How was the 'wealth generated'? - by cutting costs and increasing profits.

    That means you (as a oil user I presume) actually contributed to that wealth creation - brilliant. With one hand you contribute and with the other you get back (and are grateful) - what a superbly productive excercise.

    ....of course the other issue is cost cutting - now what do you think caused this leak?

    The cost savings that you enjoyed have just been absorbed by the coast of louisiana, florida etc. and the wildlife which has been destroyed.

    I bet you're really proud of Tony - and his predecessor Lord Brown - they've delivered you paper money and in exchange all they wanted is to destory a bit of the sea. Of course paper money can be printed (as it is being) but you cannot replace the sea.

    generate wealth indeed - it's been 2 years now I think and still nobody has been able to clearly explain 'wealth generation' - and yet the phrase is used with such readiness.

    Just goes to prove, some people will repeat anything they hear, I said some people will repeat anything they hear.

    I remember when bankers were 'generating wealth' - and then we found out they weren't - and we're left with the shortfall.

    I think the zombie banks have zombified the people too.

  • Comment number 20.

    So BP sets aside $32.2 billion, and Union Carbide settled to pay about $500 million for the Bhopal disaster which killed thousands of people and is considered the worst industrial disaster of all time?

    Interesting.

  • Comment number 21.

    "...one-off payment of over £1m and a £600,000 pension for life from the age of 55 ..."

    So much for the super efficiency of the private sector and the 'excessive' pensions of the evil teachers, nurses etc.

  • Comment number 22.

    OK, some on here talk about Halliburton and Transocean making the physical mistakes that caused the mess. Maybe they did, maybe they didn't.

    But surely, that's not the point?!

    The point is that BP's management and structure was so poor that it put itself in a position where it could be crippled by the actions of a few remote individuals. That should be the reason for removing the CEO, Chairman and the board.

    Mr Hayward's inept performance on the ground in the US is a side show. He's simply not the kind of guy some Americans like very much. Personally he seems decent to me. I am not bothered by his pension, it's OK by me. I just hope the rest of the board (who look like staying) pull their socks up or that ain't gonna be a BP.

  • Comment number 23.

    '16. At 09:51am on 27 Jul 2010, Nick wrote:
    "In the fullness of time I expect that we will find the blame does not land anyway near as squarely with BP as Obama et al would like."

    I agree. How Halliburton and Transocean seem to have been absolved of responsibility is quite incredible.'

    I suspect it will be years before this is all sorted out. When the well is finally plugged and BP are well and truely on top of the clear-up the multi-billion dollar lawsuits will be served. I'm sure BP will share the bill with the American contractors.

  • Comment number 24.

    It really annoys me the hypocrisy in America. They are the most oil hungry country in the world which is why deep sea oil drilling is necessary. Not to mention the fact that Exxon Mobil , an American company, have been leaking oil in the Niger Delta for years without doing anything about it. As soon as its in Americas back yard all hell breaks loose, but the poor people of Africa who have no say have been having there environment destroyed for years. Then there's all the other American company's who do way worse things around the world on the regular (eg Bhopal disaster). It beggars belief they can be so hypocritical. But what astounds me the most is that a massive company like BP, a company so important to the British economy, can have such a timid little excuse of a man at its helm. Why did Hayaward allow himself to be bullied. Why have BP allowed the Americans to get away with this hypocrisy- and dont tell me that it was to avert a PR disaster because it was one anyway. Come on BP grow some cajones for crying out loud. Yes the spill was a great tragedy, but not the fault of solely BP.

  • Comment number 25.

    Yes he's getting a huge over-the-top amount of cash, but don't know what business it is of people on here to moan about. BP have not received taxpayers hand-outs to save them like the banks or such other. It's their business, it's their cash & that's how it is.

  • Comment number 26.

    I don't see why people make such an issue out of his pension. The guy has worked for 25+ years for the company and in that time he has paid contributions towards that pension, why should it be taken away because he has been made a scapegoat?

    Yes he said some stupid things and probably shouldn't be the public face of the company but that doesn't mean he is not a competent, if not very good, manager/director. He didn't stay at a company for 25+ years and move up through all the positions unless he was very able.

    Just the fact that he is most likely going to get a different position at BP shows how much he is valued.

  • Comment number 27.

    If I could work for a pension like that I would, lets not be silly about the envy and all that.
    But in these times of political unrest ( in my view ) having a hair shirt and having a complaint about anyone but who is saying it seems now to be the norm.

    Who will be next the the firing line?????

  • Comment number 28.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 29.

    A few facts:

    BP was nor operating the rig - it was Transocean
    BP was not doing the cementing - it was Haliburton
    BP did not make the failed blow out preventer
    BP has only a 65% interest in the failed well
    Although he lost his job for trying to play down the likely damagae from the spill, Hayward was almost certainly right and the damage will not be remotely as great as some have been trying to make out.
    BP has done everything humanly possible to sort the problem - unlike other parties who have done nothing.

    Oh, and I can't believe Robert P sat in the BBC news studio and diplayed his lack of knowledge of UK pension legislation!

  • Comment number 30.

    Whilst I sympathize enormously with everyone that has been affected by the ongoing disaster in the Gulf, am I alone in seeing what must surely be a silver-lining in BP's cloud?....once Macondo is permanently sealed, and the US government have put in place extended safety requirements on all deep-sea operators, the only company that will have assembled the experience, expertise and technology required to fill those new requirements will be BP.
    Until this unfortunate accident occurred, much of this didn't even exist....so I expect that such services will be much sought after, and I expect BP to be in prime position to provide those services to the wider oil industry.
    Providing such distaster prevention and recovery services could even become an industry in it's own right if we are to continue exploring oceanic resources at such great depths.

  • Comment number 31.

    @ 14. At 09:45am on 27 Jul 2010, Puntav wrote:

    > Ten tips for leading a better life
    > 7 Pensions are a good thing to have but they are long term
    > investments designed for 30-40 years.

    Pensions are especially poor investments. The "professionals" raid them for
    30 years, and you end up living on £2K a year! Forget pensions, unless
    you are a Sir Greedie.

  • Comment number 32.

    @ 11. At 09:28am on 27 Jul 2010, NetherWallop wrote:

    > I'm a BP shareholder. That means I'm one of the owners of the company.
    > Which gives me a right to comment on Tony Hayward's pension.

    I'm a BP shareholder. Which gives me a right to comment on Tony Hayward's pension. That slacker (who has now been chucked out on his rear end) cost us a bundle and deserves nothing. There may be one or two sycophants who can't understand how high compensation forces up prices. What's sauce for the goose is sauce for the gander - we should be paying those who work, not those who just talk about work.

    Put someone in who can keep track of things - that bloke had never heard of the Macondo oil field. Well, he's heard of it now, hasn't he?

    And never reward failures.

  • Comment number 33.

    21. At 10:06am on 27 Jul 2010, jon112uk wrote:

    "...one-off payment of over £1m and a £600,000 pension for life from the age of 55 ..."

    So much for the super efficiency of the private sector and the 'excessive' pensions of the evil teachers, nurses etc.

    The world now swims in hypocriscy - and the Great British public thinks this is OK.

  • Comment number 34.

    18. At 09:57am on 27 Jul 2010, Ceedeer wrote:

    "It's a shame that Mr Peston can not write, or indeed speak, in properly constructed sentences in the Queen's English."

    It's not the Queens English - we were speaking English long before the Queen showed up, it's OUR English and we can all understand what Mr Peston is saying - maybe it's YOUR understanding of modern English that is causing you problems.

  • Comment number 35.

    13. At 09:39am on 27 Jul 2010, redrobb

    I agree - whilst Tony walks off with his nice wedge - what do the families of the 11 who died get?

    "generous compensation payments" perhaps?

    I'd rather keep my father / son / brother / cousin thank you very much. Tony want's his life back - and I'm sure those 11 do to.

    ....now what was I saying corporations putting profit before everything?

    Of course the sheepole won't work this one out until it directly affects them
    ...at which point you'll hear the moans and groans from the tip of the shetlands right down to the channel islands and the bemaoning of how unfair it all is - and of course how nobody warned them...

  • Comment number 36.

    Banks bring the economy down and get awarded for doing that in bonuses
    People argue - this is wrong, no this is right

    Oil Company destroys the environment and get awarded for that in pensions
    People argue - this is wrong, no this is right

    Welcome to Théâtre de l'Absurde!

  • Comment number 37.

    "Now BP's loss of $17bn is based on a provision for that lower penalty. So it's no exaggeration to say that BP's financial rehabilitation rides to no small extent on its ability to prove that its negligence was not of the gross kind."

    Even in America the State must prove guilt beyond a reasonable doubt. BP does not have to prove it was not grossly negligent. The state must prove that it was.

  • Comment number 38.

    17 Hilarious. You could get any job you wanted but CHOOSE not to be a CEO. Yeah, right. Like saying you could play football for England but chose not to. Dream on.

    You could be CEO of your own company. And I bet one day you'll think a bit more about dreaming a bit more about one day getting around to it.

    You sound a bit bitter when talking about wealth...more of the same. You COULD be wealthier but your morals stop you. Yeah, right again.

    You don't invest in shares because you think it's gambling? So you haven't got a pension plan? And you look down on anyone who does? How moralistic of you. Can you see the ground from your high horse? Perhaps we should all rely on the state for everything.

    Ooooh, you're going to make me eat my words on investing? You DO sound tough. Again, dream on, I've already set a stop loss at £4.00 so my profits in BP are locked in and I'll trail the stop loss up as the sp rises.

    As for working untill I'm 75, I enjoy what I'm doing so why shouldn't I if I choose to? Or I could retire 20 years before that and play a lot of golf. That's the sort of choice that it's possible to have with a lot of hard work and a little bit of luck.

    You view of the world is just so.........narrow. You waste time bemoaning things you'll never be able to change and blaming 'big business' for everything wrong in your life. By the time YOU'RE 75, you might be realising too late what a waste of time it all was and what you might have achieved.

  • Comment number 39.

    #30

    Which is why Exxon et al will be keener than ever to snap it up at it's distressed market cap.

    There may be madness and hypocrisy on display in Congress but there's also a grim business logic.

    Just wait till the duct settles

  • Comment number 40.

    12. At 09:38am on 27 Jul 2010, writingsonthewall

    What have they been doing for the 50 years they needed?
    Proabbly trying to kick Jim Hansen, and funding the deniers



    19. At 10:02am on 27 Jul 2010, writingsonthewall

    Bravo!

    There is a technique, quite effective it seems called Perception management.

  • Comment number 41.

    go so he gets all those millions in pensions, would the familymembers of the killed persons get the same?
    They don't get there life back.

  • Comment number 42.

    Its not just that the $32.2bn pre-tax charge for the spill includes no allowance for any fines or penalties other than the minimum under the Clean Water Act, but you are seriously underestimating the time, energy (?) and cost - (without even considering the damages payout) - associated with the multiple claims /litigation that BP will face for years to come - remember that some of the Exxon Valdes litigation took over 10 years and ultimately went to the Supreme Court. $32 billion is just the end of the beginning, its not even close to nearing the end ......

  • Comment number 43.

    26. At 10:31am on 27 Jul 2010, remcorausch

    My granny worked until she was 70 and got 0. Fuss! Fair is fair.

  • Comment number 44.

    "Why did Hayward allow himself to be bullied."

    In fairness, he was faced with an impossible situation the second Obama made a public personal attack on him. Heads of state don't do that, or certainly shouldn't.

    While the distress at the spill is certainly understandable, it does seem very odd that a company which has been more cooperative and willing in clean-up than any in the history of energy and chemical business should continue to be demonised. But Obama's attack caused a lynchmob hysteria.

    In the end, I fear everyone will lose from this overtly political approach of creating a hate figure.

    BP will start questioning whether its chequebook is being abused by inflated or irrelevant claims and look at claims more carefully. The operators and American staff actually responsible for the spill may continue to escape censure. BP, the largest single provider of US oil sources, may focus on other regions.

  • Comment number 45.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 46.

    Coul the oil industry be creating a new growth industy?

    Taking the unemployed off the dole and paying them to write e-support posts. Or is Perception management really employed in the UK and not just by the Pentagon in the US?

    I think it must be Perception Management.

  • Comment number 47.

    Robert Peston is right to say that the most important part of BP's statement is that it does not consider it has been "grossly negligent". The financial statement has been presented, presumably with the best legal advice available, on that basis. The well has been capped and is showing no signs of leaking at lower levels which would tend to support BP's opinion that the cause of the well blow-out can be fairly laid at the door of other parties. In the absence of a reasonable case to support "gross negligence" or "criminal negligence" it is likely BP can collect 35% of spill costs from the well partners and expect a major contribution from it's contractors. It may take several years for the legal cases to conclude, but having taken prudent steps to have sufficient funds on hand, BP is now in a strong position to see this crisis through.

  • Comment number 48.

    26. At 10:31am on 27 Jul 2010, remcorausch wrote:

    "I don't see why people make such an issue out of his pension. The guy has worked for 25+ years for the company and in that time he has paid contributions towards that pension, why should it be taken away because he has been made a scapegoat? "

    ...but isn't that exactly what companies are doing to staff up and down the country in both public and private sector?
    They paid in their contributions too - but now are losing benefits as a result - except their pot is far, far smaller.

    It seems that living in our new 'hypocriscy' is going to be difficult to do - I mean you can't expect the same treatment to be applied to those at the top as those at the bottom.

    Ask the Equitable life pensioners whether this is a 'brave new world' - or whether it's actually the same old one wrapped up in tinsel.
    What about the numerous people who have lost their pensions alltogether because of their company (or scheme) failing?

    ....or do we just say - TOUGH LUCK?

    If it were luck then we could curse it - however the difference in salary ensures that luck has a value placed on it.

  • Comment number 49.

    As Operator of the Macondo licence it was BP's obligation to shut off the subsea oil flow and deal with all aspects of the pollution caused.

    Accepting that obligation does not mean that BP have accepted responsibility for the actual blow out and it's tragic consequences. BP have joint venture partners in that licence who should be contributing their share of the obligation to pay for the well-capping operation and the cleanup and consequent liabilities of the oil spill. This includes smaller US companies facing the possibility that they could be in over their heads financially, and consequently they are jumping on the “blame BP” bandwagon and anti BP sentiment in the US to save their bacon.

    A full investigation into the actual cause of this disaster will probably await the recovery of the blowout preventer equipment from the seabed, after the well has been finally plugged and abandoned. It is significant that that equipment is owned and operated by Transocean, a US company that was contracted by BP to drill the well. The outcome of that investigation could eventually change BP’s currently perceived position and mitigate the extent of the liability that BP seems to have accepted in its’ attempt to play the good guy.

    So the jury is still out on the extent of BP’s culpability– but not so in the mindset of US public opinion, who for political and commercial reasons have already been given their culprit, and the hysterical lynch mob is eager to see BP hang now.

    BP completely misread the US public sentiment by attempting to play “with a straight bat”. Wrong game guys, it would have been preferable to have employed an aggressive PR advisor from the US who understands baseball !.

  • Comment number 50.

    So based on the worst case scenario of the liabilities is the stock a buying opportunity Robert? Or maybe Trans Ocean (RIG/NYSE) is a better bet?

  • Comment number 51.

    #17. writingsonthewall wrote:

    "I have lost count of the number of people who make these sorts of claims - Northern Rock, RBS and Lloyds - same people making the same "I'm so clever, I am going to make a profit" - and now they're all strangely quiet - vanished, never to be seen again."

    Perhaps that's because we've taken our profit and run.

    I bought into RBS at 13 (not quite the trough, but hey-ho), sold at 46 (again, I could have made a lot more if I'd held my nerve) and made enough profit to pay off my mortgage, which is what I shall do as soon as the interest rate I'm getting on my savings falls below the mortgage rate I'm paying.

    Capitalism... don't you just love it?

  • Comment number 52.

    36. At 11:29am on 27 Jul 2010, plamski wrote:

    "Welcome to Théâtre de l'Absurde!"

    First we had aristocracy
    Then we had democracy
    Now we have hypocriscy
    Which will develop into Kleptocracy
    ...which will take us back to Plutocracy / Aristocracy.

    Meanwhile, the sheepole all think we're making progress.

    I'm going to teach my children - "forget practical subjects - learn the art of deception as it will be your path to riches"

    ...I wonder if the local Uni will do a course of deception - it's the most valuable skill in today's society.

  • Comment number 53.

    For some time I have been hoping that BP Shareholders would start a BP Defence fund to take legal action against populist American politicians and gutter press for the malicious lies and slanders they have spread. Their comments were calculated to damage the image of the company and shareholder value, for motives of self interest. Surely the American law courts which are notorious for generous settlements could work for BP shareholders as well as to their detriment.

  • Comment number 54.

    #10 wrote
    Blimey! Members of the wealthy elite awarding themselves big salaries and fat pension pots - gosh what a surprise! When are we going to wake up to the 'realitiies' of life under capitalism? I sometimes wonder whether people live in some sort of fantasy country where things are fair and everyone is rewarded according to merit and hence the shock when they see such naked 'abuse'. Get real. That IS how capitalism operates. Except for occasional examples, the wealthy, by and large, build the world for themselves, grab what they can and keep it. If you support capitalism you support that notion. If you don't like it - change it, don't vote for it!

    I'd like to vote for something other than capitalism, believe me I really would, however when I voted in the last election the only realistic choice available were The Tory party, the Labour party and the Liberal party, who all support neo-liberal capitalism. There is no choice at the ballot box. Capitalism owns and controls everything and is not about to give it up any time soon.

  • Comment number 55.

    What's all this talk about banks? BP is an oil company. Or is it just easier for the blinkered ones to think about all evil capitalists the same.

  • Comment number 56.

    Robert, I've just watched your shorts again on "A new kind of capitalism", god your so far wrong you can probably see your self in the distance.
    "Ethical capitalism" says Dave Cameron, the multi millionaire Etonian.
    What planet are you two on?. The bit that really annoys me is when the Torys blame it on a failure of government to regulate properly, when it was the bloody Torys who de-regulated the city in the first place. The current mess is due to Tory party policys that the Labour government were too scare to repeal because the those nice well balanced people at the Daily mail and the Sun would have crucified them.
    We really do need a revolution of some sort in this country!

  • Comment number 57.

    Tony Hayward. £1 million pound salary in lieu
    £600k pension. His company have to earn every penny of income and pay out if the risky business they are in goes wrong, and sometimes lives are lost. Accountable to shareholders and it appears the president of the USA. Gets it wrong and loses his job.
    Mark Thompson. Director General of the BBC. Salary £830k
    Max. pension possible would be approx. £500k. His company has guaranteed income and only concerns itself with how money is spent. Accountable to unelected mandarins of the BBC Trust. Very low, near zero risk in both business and safety. Gets it wrong... well it never happens because it is always bery subjective, so nothing happens.
    Mmmmmm. Not a lot in it is there? Stand on an oil rig in the middle of the sea or have a lavish lunch with 'media opinion leaders'.Think I know which one has the best deal overall.

    How dare the BBC even suggest that Hayward is overpaid. What absolute hypocracy.

  • Comment number 58.

    Here is a question...(with some unsettling answers!!)

    If BP could not raise then funds would the British Taxpayer be required to bail it out?

    This is an important question (see our 'wonderful' global banks banks).

    This amply demonstrates that global companies cannot be bailed out by any individual state. Now since BP is predominately US based, and the problem is US based, then why shouldn't the US taxpayer bail out BP - after all the oil is being extracted for them?????

    Let the US taxpayer pay!!!! Indeed make them pay that would be equitable and just.

    Why should the British pensioner be hauled over to coals to save the USA's absurd addiction to oil!!!!!

  • Comment number 59.

    It is sanguine to believe BP can escape the prima facie charge of gross negligence- given that Anadarko's existence might depend on Anadarko proving that BP was grossly negligent. It will be interesting to see what accommodation BP reaches with its partners, to keep them onside.

  • Comment number 60.

    anyone who condemns Hayward's salary is a hypocrite. I'm sorry but there is not one person here that could honestly 100% HAND ON HEART say that they would turn that down if they were offered it. Tbh I don't see why he's being blamed for it. Was he on the rig, did he inspect the rig, did he help build or plan it.... How can he personally be held responsible for it. Well done to BP for not fighting against paying out compensation and here's hoping they can learn from this whole debacle.

    And before anyone accuses me of being utterly pro BP...my sympathy goes out the the people on the south coast of the U.S. there this disaster could resonate throught communities for decades.

  • Comment number 61.

    hmm, TH wasn't an incompetent manager - he turned a floundering leviathan of a company - performing significantly worse than its peers, into one of the world's leading corps, all within 3 years. People who had their pension funds invested in BP would have been singing his praises. I don't believe he did this by asking his employees to forget responsibilitites and cut safety corners. The Horizon incident was not *his* fault personally, and yet he has grimly accepted the consequences, including the death threats he and his *family* received, of all things. What did he do wrong? Forgot for a moment that the literality of US culture means that self depracating and ironic Brits have to consciously translate what they mean into American before they open their mouths. Yep, sack him for that; payoff is a bit big tho!

  • Comment number 62.

    psopod: are you familiar with the term speculation? Hiring someone always has some implicit risk, but when the contract allows that person to shift all risk to others (and in the case of Hayward the list includes personnel in platforms, fishermen in the Gulf of Mexico coast, pelicans, etc.) and still win money, the situation is the same that lead to the financial crisis of last year. No, it is not jealousy; its "gosh, he managed to have other carry the risk and run away with the gold". In financial terms, this is nonsense.

  • Comment number 63.

    Two points:

    Firstly for those who think his pension is excessive it isnt. I work for BP and his pension is exactly the same as mine ie two thirds of his final salary. Its the same one that all BP employees enjoy so why should he not be entitled to this having contributed towards his pension since joining the company as a young graduate? Heaven forbid that our pensions become discretionary. So when you hit retirement age your pension can be reduced by how you've performed throughout your career? - what a ridiculous notion. You dont get to be CEO of one of the largest corporations in the world by bumping along being an under performer.

    Secondly for those of you commenting on how much his pension is going to cost shareholders I can tell it will cost them nothing. BP Plc do not make any pension payments to their retired employees it is BP Pension Trustees Limited that manage the fund and make payments. The pension fund is a separate entity, with its own board of directors and is self funding. They receive pension contributions and make investments on behalf of the members - its not rocket science.

  • Comment number 64.

    Many people will point out that Exxon's litigation went on for years. This is not a bad thing for BP, time value of money and repeated appeals will water down the financial impact. The old argument of deducting clean up costs into fines will also apply which gives them an instrinsic tax kicker

    Very hard to find BP gross negligent, it will be able to find parrallel situations where they adopted similar practices to no ill effect and will also point out that the well design and subsequent changes were approved by the US Government.


    They will also point to the equipment, the monitoring of the equipment and the safety record and aspects of drilling safety used by Transocean.

    Remember that Transocean owned the rig, the drilling equipment, employed the employees who died, maintained the equipment and operated the equipment. BP will always always always bring a giant law suit against Transocean for this. It will also prove to be very good at deflecting a lot of law suits because the American media have failed to understand just where Transocean lies in all this (up to its neck) and no doubt so will the plaintiffs

    They will sue Mitsui and Anadarko also to recoup the 35% that is owed. Independent legal observers have said that BP will be successful in this.

    They will also recoup a lot through insurance, although not necessarily their own

    Financial accounting policies are such that if a liability is likely you provide for it, if an asset is likely you don't. That is why a lot of the potential financial mitigation is not well known about as it has to be kept out of the accounts.

  • Comment number 65.

    The 11 people who died don't get their life back

    But i'm sure Transocean the company who employed them on their drilling rig "the Deepwater Horizon" might consider turning on the safety alarms next time

    And maintaining their Blow Out Preventor

    Could get an accident you know

  • Comment number 66.

    51. rbs_temp.

    (I posted this the other day with people like you in mind, and I'd wonder if you might like to tell me what your actual postion would be, since you have so much of your ego wrapped up in it, if, on the off chance your beloved system was to fail, would you be prepared to put your money where your mouth is and go down with the ship?)




    -I have a thought for all the bankers, the craven capitalists and their apologists who have time and time again come onto these boards and declared triumphantly that the financial crisis is over, or that it isn't as bad as people are saying it is, that the government will soon turn a comfortable profit from its shares in the banks, that there will be no more problems, no eurozone government debt default and no further bailouts blah blah.

    I wonder that, if, on the off-chance things don't actually get better after all, if we don't magically return to sustainable and meaningful growth, if we have either crippling and sustained deflation, or vicious and lethal hyper-inflation, or indeed a full spectrum economic meltdown, including massive bank failures, currency collapses, and the loss of hundreds of thousands or millions of peoples life savings, ruined pensions, and the impoverishment for decades to come, of the west, and a debt legacy that will hobble our descendants, if, any of these scenarios come to pass, will the bankers who have denied so vehemently and confidently the possibility of the fall of their beloved system, actually do the decent thing and fall on their swords, as, I suspect, the world post-economic-disaster will simply not require such deluded, conflicted and compromised souls?


  • Comment number 67.

    52. At 12:08pm on 27 Jul 2010, writingsonthewall wrote:

    36. At 11:29am on 27 Jul 2010, plamski wrote:

    "Welcome to Théâtre de l'Absurde!"


    ...I wonder if the local Uni will do a course of deception


    The ability to deceive is acquired during early years development. Either you've got it or you haven't.

  • Comment number 68.

    57. At 12:34pm on 27 Jul 2010, jacko wrote:
    "Mark Thompson. Director General of the BBC. Salary £830k"

    Good grief.

  • Comment number 69.

    The change in CEO is political not operational. Those who seem to be aghast at the pension provision or salary pay off - please spare us the mock outrage - he is entitled to it.
    As CEO of a global company a salary of £1 million/per annum is not huge and his pension is comparable with many final salary schemes in percentage terms.
    Petty jealousy and parochial views just show up the small mindedness of people who espouse them.
    As for culpability - BP believe this was an unforseen failure and that the companies that partnered them are equally to 'blame' - The drilling work is at the extremes of current technology and risks are present - BP has now gained valuable experience in dealing with both the original faults and the subsequent repair. They will continue to work to clean up and I am sure that in time things will be returning to normal.
    To single out the CEO as the guilty party is I am afraid fatuous in the extreme and whilst he has the operational command he isn't the one calling the day to day shots. In dealing with this incident and its aftermarth the people involved either at fault or not will learn many many positive things and to go on some politically motivated witch hunt is pointless.

  • Comment number 70.

    "Why should the British pensioner be hauled over to coals to save the USA's absurd addiction to oil!!!!!"

    Because we're the Junior partner.

  • Comment number 71.

    Just wait... in five years' time, the USA will be begging BP to drill more wells in the Gulf of Mexico to keep petrol prices down. But BP will by then be too occupied drilling elsewhere. What goes around, comes around.

  • Comment number 72.

    I am a strong supporter of BP, both in the way that it has acted on its promise to pay for the clean up costs in the Gulf of Mexico, and in the way that it had been able to perform the incredible engineering task of capping the well.

    As to culpability and responsibility I would ask that readers look at the following well informed blog. No pun intended.

    http://hindenblog1.blogspot.com/2010/06/burn-exploring-popular-myths-about-bps.html

  • Comment number 73.

    It seems to me, the difference between Tony Hayward's pension and those of the public sector and the investment bankers is that no tax payer has had to bail BP out. BP is not suggesting that it cannot and will not cover all claims for damage from the accident while still paying a huge pension, they have put aside money to cover the spill, so what Mr Hayward is or is not getting paid is surely irrelevent.

    In terms of demanding BP develop alternative energy and go 'beyond petroleum'. Eventually the oil will run out, either BP will have developed into a radically changed company or they will cease to exist - something that a great many people posting here seem to desire - so you might as well rejoice in BP's inactivity. Inevtiably, the market will create the need as oil prices rise and rise to come up with alternatives.



  • Comment number 74.

    It seems completely silly that a CEO's pension of near 1 million pounds a year is newsworthy? The CEOs of big oil companies, perhaps some of the most profitable in the world, will obviously be earning a lot of money - did people honestly expect them to earn an average salary? They are supposed to be the most well-paid people in the company if not the world. British Companies tend to pay their top employees a lot less than their American counterparts. HSBC pays their Hong Kong based CEO a pittance compared to the CEO of the New York based Citibank.

    Tony Hayward should by no means be forfeited his pension which he has hard earned after a lifetime of work simply because of an unfortunate accident in which has already costed him his job and his reputation. If anything he should be rewarded for enduring the wrath of the Fox 'News' - where blaming the Brits seems so much easier than pressing against Halliburton and other powerful, Republican aligned American companies. BP has suffered one of the largest losses in its history to pay off millions of already poor fishermen and further pay off some of the most obscurely affected individuals and yet still shouldering heavy, unreasonable criticism.

    Being in the USA recently is a shock, especially from living in such an international minded place like Hong Kong, since the entirety of the American news agencies fail to report on anything international in nature and spend almost all of their airtime slandering BP with nothing but empty opinions. I, and I am sure the rest of the world are sick of seeing BP being demonized time and time again despite the capping of the oil leak and the enormous compensation plan, even sensationalizing the Lockerbie Bomber to the extent in which the independence of Scottish Judiciary is being openly spat on by American Senators and their 'News' agencies. Surely with the replacement with an American as the CEO, Yankee patriotism will kick in and BP will fade from the spotlight.

  • Comment number 75.

    63. At 12:56pm on 27 Jul 2010, TheKritic wrote:
    "Firstly for those who think his pension is excessive it isnt. I work for BP and his pension is exactly the same as mine ie two thirds of his final salary. ... Heaven forbid that our pensions become discretionary."
    ================================

    I thought final salary pensions were something only evil public sector employees like nurses and teachers got?

    Sounds like if your company is doing well then they can still afford a decent pension for all their workers.

    Discretionary pensions? Don't worry that is only for the evil nurses and teachers.

  • Comment number 76.

    There is another scenario to look at here. Regarding the cost and ability to pay. What if this was not BP. What if this was a smaller company in the same situation - could they afford to fix such a problem let alone pay for the cleanup and damages.
    So why not stress test big companies to see if they can cover their potential liabilities when something really big goes wrong.
    Far be it for me to point out that us smaller companies pay insurance for such eventualities ... does BP not cover itself for with any insurance ? My company turns over a mere 0.8 million, but my company covered for upto 10 Million public, product and service liability. We would pass the stress test.
    "In practice, it may be able to recover 35% of much of the cost from the well partners, Anadarko and Mitsui." Well I hope they are well insured - anyone care to stress test them ?
    Are only getting half the picture of the whole scenario? Never mind Taxpayer bailout - the UK does not have the money to do that.
    And the UK tax payer is already going to lose out this year and next year at Pretax loss mean another few millions/billion less income this year into the treasury and next year too, as a loss get carried forward. So the UK tax payer will get stung yet again.
    Maybe its a good thing that they are not insured - Those Lloyds names would be a tad poorer yet again !
    What a mess - what a horrible mess, and that’s not just the Oil.
    Oh and as per the topic - £600,000 per year pension. Just goes to show how smart he is does it not. As smart as that footy guy that runs England who we cannot afford to get rid of.


  • Comment number 77.

    60. At 12:47pm on 27 Jul 2010, Fortress Lamex

    Don't think that there are many people in the UK who would sleep at night knowing what they did to get that money. Cut safety, cut risk controls, destroy the environment and the ability of thousands, perhaps hundreds of thousands to make a living, destroy whole communities, and destroy 11 families.

    No. I'd turn down the money. How can I be sure? I've turned down a lot less in my time, on offer by companies where the ethics need more than a scrub with some Clorox.

    I sleep at night. Some things are worth far more than money.

  • Comment number 78.

    36. At 11:29am on 27 Jul 2010, plamski wrote:

    "Welcome to Théâtre de l'Absurde!"


    ...I wonder if the local Uni will do a course of deception


    They do, and I've taken the class. It is called 'International Business Management' - load of mindless dribble.

  • Comment number 79.

    #70. Nick wrote:

    "
    "Why should the British pensioner be hauled over to coals to save the USA's absurd addiction to oil!!!!!"

    Because we're the Junior partner.
    "

    Some special relationship!!!!! Time for the divorce court!

    Lets see: US investments under UK regulation and/or control - a number of banks in London. We could impose a special tax on US investments here so that US pensioners pay for their own misguided obsession.

    But seriously, this BP nonsense is an unpleasant feature of globalisation - just like the British taxpayer bailing out RBS's duff overseas investments.

  • Comment number 80.

    38. At 11:38am on 27 Jul 2010, AndyC555 wrote:

    "17 Hilarious. You could get any job you wanted but CHOOSE not to be a CEO. Yeah, right. Like saying you could play football for England but chose not to. Dream on."

    ...oh you mean like my friend, Tottenham wanted him to sign but he decided there was more reward in going to universtiy instead? - yes, this does happen. Don't impose your inferiority complex on the rest of the world.

    "You could be CEO of your own company. And I bet one day you'll think a bit more about dreaming a bit more about one day getting around to it."

    It's no dream of mine.

    "You sound a bit bitter when talking about wealth...more of the same. You COULD be wealthier but your morals stop you. Yeah, right again."

    I'm not bitter about anything - I have wealth - but I don't measure it like you do. When you're sat with your big pile of worthless paper money - you'll understand what I meant.

    "You don't invest in shares because you think it's gambling? So you haven't got a pension plan?"
    No - I don't.

    "And you look down on anyone who does? How moralistic of you."

    I don't look down on people who have pensions, I look down on people who have pensions and hurl money into it but haven't spent a minute asking why their encouraged to have one in the first place - it's called making sure everyone has a 'chip in the game' - which makes it easier to fleece them - an old gambling phrase I believe.

    "Can you see the ground from your high horse? Perhaps we should all rely on the state for everything."

    is there a problem down there? - don't like your dreams of 'making it' shattered?
    I don't kow if you realise it - but you already rely on the state for a lot - for without legally enforced working practices which are monitored by the state then you would be working 23 hours a day for bread and water (or didn't you pay attention to 'private sector led victorian history' at school) - Try reading Dickens - "are there no workhouses, are there no prisons".

    "Ooooh, you're going to make me eat my words on investing? You DO sound tough. Again, dream on, I've already set a stop loss at £4.00 so my profits in BP are locked in and I'll trail the stop loss up as the sp rises."

    ....and your profit comes from your own pension? - very clever - ingenious - you really are a sharp cookie. if only you stood back from the narrow view you take and you might see the BIG picture and then it would become clearer. You can lord up your stop loss all you want and your supreme cleverness - however those who are less blown away by your technical bravado will know that unless your Warren Buffet and you bought £6 million BP shares - once you deduct the transaction costs and taxes - then you're winning won't seem so grand (or did you forget to take those into account)

    "As for working untill I'm 75, I enjoy what I'm doing so why shouldn't I if I choose to?"

    Yeah - that's what we all tell ourselves....it's a way of softening the pain. If you're job was so enjoyable then you wouldn't be getting a salary now fella.

    "Or I could retire 20 years before that and play a lot of golf. That's the sort of choice that it's possible to have with a lot of hard work and a little bit of luck."

    Oh really - well you clearly haven't heard of hyperinflation or deflation - both of which will scupper your plans to retire. My old man retired in the last 3 years - what a shame because his 'planned income' which he built up over a number of years with a lot of hard work and luck - is not what he was expecting.
    I notice you also talk about luck - is it just lucky that the 'house wins' every time? - or is that merely coincidence? If you have 'some luck' - then what amount of luck do Goldman Sachs have? - Have they cornered the 'luck market'?

    "You view of the world is just so.........narrow."

    Mine? - No, from where I sit I can see a very wide horizon.

    "You waste time bemoaning things you'll never be able to change and blaming 'big business' for everything wrong in your life."

    Firstly it's not wasting time trying to warn others of the dangers they face - I don't care about those who don't listen, those that do will thank me in the future.
    Secondly there is nothing wrong in my life, there is a real problem with some self centred people (like yourself) that you cannot understand why someone would crticise the very system they benefit from.

    ....maybe when you work that one out you will realise what a fool you've been. There are plains higher than monetary wealth - but you choose to assume that I have been done wrong which is why I critcise the system. I have noticed this is consistent throughout those who come from the same angle "why would he do that? - I mean it's working against his interests"
    Sadly - until you rise up from your narrow field of self gratification you will never understand.

    "By the time YOU'RE 75, you might be realising too late what a waste of time it all was and what you might have achieved."

    Oh don't worry about me - I am already achieving what I want at the grand old age of 36. I have demonstrated to my peers that 'making money is a clowns game' - by making it - and making it look easy. Now I am showing them why it is so wrong to pursue such a system and how this will end horribly

    You see - bizarrely - in order to get credibility I had to demonstrate I could be a success in the system - otherwise people use the same arguments you do - jealousy, green eyed socialism, chip on your shoulder etc.

    Well I played your game and proved my metal - so now I have proven I can play I am going to tell you where it's all going to go wrong.

    Listen, or don't - I don't care....just don't come complaining afterwards - I find it embarrassing.

    Now get back to work - if you want to retain that 'choice' of retirement.

  • Comment number 81.

    46. At 11:58am on 27 Jul 2010, copperDolomite wrote:

    "Taking the unemployed off the dole and paying them to write e-support posts. Or is Perception management really employed in the UK and not just by the Pentagon in the US?

    I think it must be Perception Management."

    Now that wouldn't be too bad - at least they were getting paid for it. The really sad thing is most of these defenders are in fact volunteers as they defend the corporations for free!

    I guess advertising is working well after all - that's why my nephew recognised the golden arches before he knew what our flag looked like.

    Now repeate after me - "corporations are good, they provide us with food, they generate wealth and givedirectionless people a purpose"

    3000 years of human development - how was it possible without corporations????

  • Comment number 82.

    Re BP
    All emphesis seems to be on the size of the reported quarterly loss and the size of Mr Hayward's severance package, which is of very little significance in the context of the overall billions.
    Not a word in any of your reports or bloggs Robert or anybody else's reports as far as I can see about when dividends might be resumed. A significant issue to any investor or pensioner.What's your view?
    Regards Roger Lane

  • Comment number 83.

    In response to comment No.1 I totally agree that some people are a tad jelous of the highly paid CEO's. We all dream of raising to th pinnacle of some company to earn fat salary and buy expensive things, that's called ambition. Do we notice when a company is in cricis whose rug is usually pulled, who faces the fire ?. How about we cap all company executive salary at mid managment level and we will see what type of leadership we will ge in these organizations. The disaster is unpercedented, BP could not find a quick solution, we will learn from this experience and most importantly WE WILL CONTINUE TO USE FOSSIL FUELS.

  • Comment number 84.

    69. At 1:35pm on 27 Jul 2010, Peter Fox wrote:
    As CEO of a global company a salary of £1 million/per annum is not huge and his pension is comparable with many final salary schemes in percentage terms.
    Petty jealousy and parochial views just show up the small mindedness of people who espouse them.


    Steady on. Tony Hayward's salary is *relatively* cheap. However, some of us feel executive salaries are excessive in *absolute* terms. Social mobility is a problem in our society affecting the welfare of many people and damaging our competitive position.

    Moreover, Tony Hayward bears *some* responsibility for this accident. In general there is no way for victims to obtain redress as board rooms have insulated themselves from accountability.

    UK plc desperately needs to get productive and competitive. Personally, I think we'd be better off with Tony Hayward types (engineers, designers, innovators and scientists) and fewer "MBA boardroom tarts" in leadership positions. And we'd be better off by improving wealth distribution so that more talented people can come to the fore at all levels of (real) business.

    Boardroom accountability would have had an impact on the course of events that led to the credit crunch - a disaster of far greater proportions than even the immensity of the Deepwater Horizon disaster whether in terms of suffering or loss of life.

    Present attitudes prevent us having any hope of restoring the real economy.

    Your second sentence, above, suggests you are not amongst those who are beginning to feel the cold wind of austerity. If, after a fair hearing, fifty per cent of Tony Hayward's pension was paid to victims or relatives, he could hardly be considered as *suffering*. If Tony Hayward has the kind of humanity I somehow ascribe to him, I don't think he would support your comments. And he would not be alone at all levels (outside banking).

  • Comment number 85.

    51. At 12:06pm on 27 Jul 2010, rbs_temp wrote:

    "Perhaps that's because we've taken our profit and run."

    Gosh - they're all out today - must be unemployment ripping through the country!
    Yeah, and I might have invented that perpetual motion machine I'm always bragging about.

    "I bought into RBS at 13 (not quite the trough, but hey-ho), sold at 46 (again, I could have made a lot more if I'd held my nerve) and made enough profit to pay off my mortgage, which is what I shall do as soon as the interest rate I'm getting on my savings falls below the mortgage rate I'm paying."


    So you managed to pay off your mortage (although I noted you didn't want to state how big that was) - lets assume it was the average £150,000 with the proceeds.

    Well that means you must have bought over 500,000 shares - nearly 1% of the shares in issue. Well if nothing else it should make you easy to spot in the market.

    So lets presume you made £165,000 from your little deal - you paid 43k in CGT and about £8k in stamp duty leaving you with about £122k.

    I don't know what you paid to trade these shares, but lets just assume there is more to be deducted.

    Shall we deduct it from your contribution to propping these fellas up through your taxes? - Now what's the favourite quote - is it £30k for every man woman and child or something? - I presume you accounted for all this when you cracked open that champagne.

    Big picture see - big picture. Those who centre upon the 'self' cannot see the wider picture - and probably don't want to as it will collapse their beliefs.

    So for your investment risk of £65,000 it all sounds great - except none of this is true is it? You didn't buy half a million shares with a 'spare' 60 grand you had lying about - especially when that £60 grand could have halved your mortgage without any risk at all. Unless of course you had a lot more than £60k - in which case why not just pay off your mortgage.
    Of course your mortgage could be £10k - but that would be deceptive to state "I paid off my mortgage with it" - which most people will presume is a large amount.

    "Capitalism... don't you just love it?"

    If it were true then maybe - but as your story doesn't hold any water then I guess not.

    You might fool the non-financial people on this blog with your nonsense, but I actually know what I'm talking about. This is like on homes under the hammer when the speculator claims to have made a profit - but I'd like to know where they got a central heating system fitted for £500 that's not going to fail the survey!

    Is this what it's come down to? - making up stories to support the glories of Capitalism?
    That's really pathetic - you should be ashamed of yourself.

    I do not claim the tax figures are exactly right - why don't you ask AndyC555 to work it out as he's busy working until he's 75 calculating people taxes.

    ....I mean you could pay him out of your 'winnings' - well if you hadn't made them up that is.

  • Comment number 86.

    66. At 1:23pm on 27 Jul 2010, warwick wrote:

    "I have a thought for all the bankers, the craven capitalists and their apologists who have time and time again come onto these boards and declared triumphantly that the financial crisis is over, or that it isn't as bad as people are saying it is, that the government will soon turn a comfortable profit from its shares in the banks, that there will be no more problems, no eurozone government debt default and no further bailouts blah blah."

    ...but warwick - rbs_temp thinks this is 'only a recession' (his words) - until he sees people with pitchforks outside his window - it's all just a media storm in a teacup!

    You will be amazed as to how people can wrap themselves in self interest to protect them from the harsh reality of social turmoil.

  • Comment number 87.

    63. At 12:56pm on 27 Jul 2010, TheKritic wrote:

    "You dont get to be CEO of one of the largest corporations in the world by bumping along being an under performer."

    You mean like Sir Freddie Greedie? - was he a top performer? (and I don't mean the type at seaworld who honk and clapo their hands)

    Did you rate his performance at RBS? - oh dear, your lack of expectations underwhelms me.

  • Comment number 88.

    72. At 1:45pm on 27 Jul 2010, eeyore wrote:

    "I am a strong supporter of BP"

    They're not a football team - or are you confused slave?

  • Comment number 89.

    So what happened to the Max. liability of $75M that was in place under the operating licence? So much for the rule of law.

    Basically the USA is racist, from the irritating inability to pronounce peoples and countries names correctly to operating a system of apartide almost as long as South Africa. Not to mention the attempted Genocide of the North American Indian.

    They won’t go after Halliburton et al because they are American but BP is fair game because they are foreign - they don’t have an American Accent.

  • Comment number 90.

    74. At 2:00pm on 27 Jul 2010, Shane Bryce wrote:

    "Tony Hayward should by no means be forfeited his pension which he has hard earned after a lifetime of work simply because of an unfortunate accident in which has already costed him his job and his reputation."

    ...and 11 lives....

    ....and the environment around the gulf...

    ...and the livelihoods of the gulf coast fishermen - right in the middle of a recession...

    ....and the tourism industry in those areas....

    yes, lets have a good old whip round for 'unfortunate Tony'.

  • Comment number 91.

    76. At 2:02pm on 27 Jul 2010, Big Pete wrote:

    "There is another scenario to look at here. Regarding the cost and ability to pay. What if this was not BP. What if this was a smaller company in the same situation - could they afford to fix such a problem let alone pay for the cleanup and damages."

    No - that's where the taxpayer steps in - keep up fella, this is the new cronyism where we work hard to bail out those profitting at our expense.

  • Comment number 92.

    77. At 2:02pm on 27 Jul 2010, copperDolomite wrote:

    "No. I'd turn down the money. How can I be sure? I've turned down a lot less in my time, on offer by companies where the ethics need more than a scrub with some Clorox.

    I sleep at night. Some things are worth far more than money."

    There are people on this blog who simply won't understand that.

  • Comment number 93.

    78. At 2:06pm on 27 Jul 2010, copperDolomite wrote:

    "They do, and I've taken the class. It is called 'International Business Management' - load of mindless dribble. "

    That course has been withdrawn due to the lack of "international business" - they call it a worldwide economic crisis and apparently it can even affect us!

  • Comment number 94.

    69. At 1:35pm on 27 Jul 2010, Peter Fox wrote:

    "The change in CEO is political not operational. Those who seem to be aghast at the pension provision or salary pay off - please spare us the mock outrage - he is entitled to it. "

    Do you mean like this guy? - is he from the 'finishing school for directors' too?

    http://www.bbc.co.uk/news/business-10773466

    Who else is entitled to it? - and what criteria are you judging it by? Are you qualified to make such a statement?

  • Comment number 95.

    73. At 1:56pm on 27 Jul 2010, Pharmanerd

    It seems to me, the difference between Tony Hayward's pension and those of the public sector and the investment bankers is that no tax payer has had to bail BP out.


    Good grief! Please, you didn't actually say that did you?

    You do know what the public sector is, surely? You would be able to explain the public sector to any aliens who stopped you and asked to explain education, bin men, police, courts, libraries, etc, wouldn't you?

  • Comment number 96.

    Why do the comments so far focus mainly on Tony Hayward's pension? Anyone who has held a senior role in any industry will know that success and failure are determined by many variables including LUCK. Until the Gulf of Mexico disaster, I seem to recall Tony Hayward was being praised for his stewardship of the company and his remuneration and potential pension were not being questioned. But then in April of this year the oil flowed into the Gulf and he was UNLUCKY to be BP's CEO at the time. Of course his position makes him responsible and accountable for the environmental disaster and it seems to me his departure from the company is acceptance of that fact. But having given up his job why do so many critics, including many contributors to this blog, believe they have the right to question his Ts and Cs of employment?

    The company needs to cap the leak, restore its previous good reputation and continue its 'Beyond Petroleum' journey as a successful global energy group.

  • Comment number 97.

    71. At 1:42pm on 27 Jul 2010, ItsnoteasybeingatemporaryNumberOne wrote:

    You do know that when oil prices go up 'Texas' George and his mates rake it in, don't you?

    They don't like cheap oil. They just say they do to voters at election time.

  • Comment number 98.

    2005 - Texas City explosion
    2006 - Prudhoe Bay shut down when BP Trans-Alaska pipeline found to be corroded
    2007 - Lord Browne forced out, Hayward takes over

    That's what Hayward was up against when he said he would change the 'champagne management' culture at BP. In the City and on Wall Street Hayward has been praised for cost-cutting. He has 'improved performance' and 'turned the company around' because of what the finances looked like. At the end of three years, who cared what was going on in the refineries or at the drill head, as long as it hadn't messed up the annual report.

    Whatever people say here about Americans and the British, it will be an extraordinary investigation that proves one way or the other what effect BP executive decisions had on safety practices, and that just raises the question: How can any single person be worth that kind of money?

    If UK corporation management were, as Hayward promised three years ago, a bit more basic -- connected to the rock face -- we might know who, maybe how many, were responsible for operational successes or failures. Hundreds of people in a large hierarchy like BP are involved in those decisions, and they must include proper dealings with its contractors. You can't give one person the credit for that. It's laughable to pay anyone so much, even if they get the leadership of that process right.

    In this case, the failure of BP management processes is being blamed on the leader, who is being paid for the privilege. The blame, the payment, and the idea that one person runs BP are ridiculous. Hayward's hubris was that he thought he was in charge and was changing that hierarchy because of some numbers on a profit-and-loss statement. That's just as bad as the banks' handling of 'sub prime', so now our 'betters' at the top of the free market have delivered:

    - a collapse in global payments that nearly destroyed dozens of economies and doubtless killed hundreds of thousands through starvation disease and conflict, not to mention adding to the misery of billions.
    - a much smaller disaster in the Gulf of Mexico -- a really stupid place to screw up, as BP and the City have found to their cost.

    What's next? Today optimism reigns. How long and for what reasons will just be guesses for a long time to come, because nothing has fundamentally changed.

  • Comment number 99.

    @ 38. At 11:38am on 27 Jul 2010, AndyC555 wrote:

    > You waste time bemoaning things you'll never be able to change and
    > blaming 'big business' for everything wrong in your life. By the time
    > YOU'RE 75, you might be realising too late what a waste of time it all
    > was and what you might have achieved.

    Never mind you - look what we've all achieved! Instead of coming onto blogs
    to boast about how great you are, actually do something good to surprise us.
    Help other people, instead of yourself. Give peace a chance, instead of
    all this hubris. Life is too short to spend it like you have. Try to
    climb the ladder a bit and get out of your predicament. You are in the
    gutter but we're looking at the stars, chum!

    Most of all, don't blame other people for your misery.

  • Comment number 100.

    51. At 12:06pm on 27 Jul 2010, rbs_temp

    I just realised something.. - you risked £60k on a 'punt'?

    You need to get yourself down to gamblers anonymous pal - and take those banker friends with you.

    They don't even do that on dragons den.

    Isn't it lucky it's not true - or I would be very concerned.

 

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