BP is clawing back $40 million from ex-CEO Bernard Looney

BP’s ex-chief Bernard Looney is paying a hefty price for keeping things from the board.

The former CEO “knowingly misled the board” about his personal relationships with colleagues at the time of his resignation in September 2022, the 113-year-old oil giant said in a press release. Giving “inaccurate and incomplete assurances” as part of an investigation into the relationships in 2022 amounts to “serious misconduct,” and consequently, Looney’s remuneration has been reduced by £32 million ($41 million).

For 2023, Looney will receive no further salary, pension allowance, benefits, or annual bonus. Plus, he’ll give up unvested share awards, repay half of the cash portion of the annual bonus paid to him in financial year 2022, and forfeit a portion of his award of shares that vested in August 2023.

The press release also announced Looney’s immediate dismissal yesterday (Dec. 13). He was supposed to serve a 12-month notice period ending in Sept. 2024 before his lack of transparency became publicly known and cut it short. BP chief financial officer Murray Auchincloss, who has been acting as the company’s interim chief executive, will continue in the role. A search for a permanent successor is underway.

In his first public statement since his September resignation, Looney said that he was proud of what he had achieved and “disappointed with the way the situation has been handled.”

One big number: Giving up 2023’s remaining rewards

87%: Percentage of the potential remuneration that has been automatically forfeited as a result of Looney’s resignation, including £24.9 million ($31.4 million) in performance share awards and a £2 million ($2.5 million) annual 2023 bonus. (Values calculated using a BP share price of 460.95p, the closing price on Dec. 12, 2023.)

A brief timeline of Bernard Looney’s BP career

1991: Looney joins BP as a drilling engineer as a 21-year-old graduate from University College Dublin.

2010: Looney becomes part of BP’s executive team.

April 2016: Looney takes over as head of BP’s upstream arm, the segment responsible for oil and natural gas exploration, field development and production.

February 2020: Looney is appointed CEO just before the covid-19 pandemic hits. He enters the role with a bang, committing to “net-zero” carbon emissions by 2050, compelling rivals to follow suit. At the time, Looney disclosed “a small number of historical relationships” and gave the board assurances about his future behavior.

May 2022: After receiving an anonymous tip, BP investigates allegations relating to Looney’s personal relationships. He admits to four past relationships with colleagues and assures the board in writing he had nothing further to disclose. The investigation finds that none of the relationships breached BP’s code of conduct.

September 2023: Looney’s abrupt resignation is prompted by a female BP whistleblower’s allegations, including an accusation that Looney had promoted women with whom he had past undisclosed relationships before he took the helm in 2020—and not disclosed details of all relationships at the earlier review. BP says it has begun an investigation into the allegations with the support of external counsel and will take a decision about his remuneration later.

Quotable: BP’s making an example

“This is one hell of a reaction. It demonstrates how seriously the board is taking these accusations and they want to make an example of him. Business leaders need to know they can’t lie to the board and get away with it.”

—Mark Freebairn, headhunter and head of board practice at Odgers Berndtson

Throwback: BP’s controversial CEO resignations

Many of BP’s recent CEOs have made scandal-ridden exits.

In 2010, Tony Hayward bowed to pressure after receiving immense blowback for his handling—or rather, mishandling—of the Deepwater Horizon oil rig explosion. “The Gulf of Mexico explosion was a terrible tragedy for which—as the man in charge of BP when it happened—I will always feel a deep responsibility, regardless of where blame is ultimately found to lie,” he said in his statement. At the time, BP said the explosion and subsequent environmental damage has been a “watershed incident” and the company requires “fresh leadership supported by robust governance and a very engaged board.”

In May 2007, John Browne, who had been CEO for a decade, resigned suddenly  after lying to a court about how his relationship, which put him in the throes of a perjury accusation and led to a newspaper outing details of his personal life. He had been set to resign two months later due to to high-profile mishaps, including a deadly refinery blast in Texas and an oil spill in Alaska.