BP boss Hayward to get immediate £600,000 pension
- 26 July 2010
- From the section Business
BP chief executive Tony Hayward will get an immediate annual pension worth about £600,000 ($930,000) when he leaves in October, the BBC has learned.
Mr Hayward is to stand down after sustained criticism of his handling of the Gulf of Mexico oil leak.
However, a BP source said he would be nominated for a non-executive position at the firm's Russian joint venture.
BBC business editor Robert Peston said that the pension entitlement was "bound to be hugely controversial".
BP pension scheme rules say that those who joined before April 2006 can take the pension at any point from age 50. Mr Hayward is 53.
He will also receive a year's salary plus benefits worth more than £1m.
Mr Hayward's pension pot is valued at about £11m and he will keep his rights to shares under a long-term performance scheme which could - depending on BP's stock market recovery - eventually be worth several million pounds.
Our business editor said that because Mr Hayward was leaving by mutual agreement rather than being sacked, the BP board felt it had "to honour the terms of its contract with him".
He will be replaced by American colleague Bob Dudley, the BBC understands, though no formal announcement has yet been made.
Mr Dudley, who is in charge of the Gulf of Mexico clean-up operation, was the former chief of the BP-TNK joint venture, but was forced to leave Russia in 2008 amid a dispute with shareholders.
BP is set to reveal its latest results on Tuesday. The accounts will cover spill compensation and costs of up to £19bn, and may result in the worst quarterly loss for a UK firm.
They are also likely to discuss terms of the severance package for Mr Hayward - whose performance in the crisis has been widely criticised.
Mr Hayward began his career with BP 28 years ago as a rig geologist in the North Sea before working his way up to board level. He was a popular choice for the top job when Lord Browne stepped aside in 2007.
But he will be seen to carry the can for being at the helm for the worst year in the company's history.
When he became chief executive in 2007, Mr Hayward told journalists his number-one task was to focus "laser-like" on safety and reliability.
The explosion on the drilling rig off Louisiana on 20 April, which killed 11 workers and triggered the worst oil spill in the US, raised questions about his leadership.
Mr Hayward has been heavily criticised by residents of the Gulf coast and US politicians for his handling of the clean-up and for a series of gaffes, including saying that he "just wanted his life back" and that the Gulf of Mexico was a "big ocean" following the leak.
He was also taken to task for attending a sailing event off the Isle of Wight in June.
Mr Hayward was publicly rebuked by members of the House Energy and Commerce Committee last month for "stonewalling" questions at a congressional hearing.
Journalist Tom Bower, who wrote a book called The Squeeze: Oil, Money and Greed in the 21st Century, said Mr Hayward's departure was inevitable because he "hadn't changed the culture" at BP following previous accidents in the US.
"He knew what had to be done, but he didn't do it properly. He was too slow; he wasn't inspired; he wasn't focused enough," said Bower.
The man expected to replace Mr Hayward, BP managing director Mr Dudley, took over the day-to-day operations in the Gulf last month.
Many say that, from a public relations point of view, Mr Dudley has the advantage of being American.
He grew up in Mississippi and, according to BP, has a "deep appreciation and affinity for the Gulf Coast".
BP has lost 40% of its market capitalisation since the May spill.
The company's second-quarter results due on Tuesday are expected to reveal a provision for the costs of the clean-up, compensation claims and fines to be paid.
Meanwhile, the official overseeing the US government response to the oil spill has said the operation to plug the ruptured Macondo well in the Gulf of Mexico permanently has been put back to allow more time for preparatory work.
Retired Coast Guard admiral Thad Allen said the last bit of pipe needed for the process would be put in place in the coming this week, with the actual plugging operation starting in the first week of August. A temporary cap has stopped oil from gushing for more than a week.
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