Under the terms of his contract, Mr Hayward is entitled
to current salary and benefits on his departure
Tony Hayward was in talks over the weekend about leaving his position as chief executive. His departure is due to be finalised at a board meeting today. A public announcement is likely by tomorrow morning.
Talks about Mr Hayward’s exit have centred on his severance package, which is politically sensitive and could prompt a new row with the American government.
The 53-year-old’s pension pot will pay out £584,000 a year when he turns 60, but the terms of his departure from BP could allow him to draw down the pension earlier.
The BP board is eager to avoid further political criticism but Mr Hayward is believed to want the severance deal to reflect his 28 years of service to the company, which could run into millions.
The chief executive faced heavy criticism for his handling of the Gulf of Mexico oil spill after saying the environmental impact would be “very, very modest” and “I want my life back”.
Following Mr Hayward’s comment on the crisis, President Obama said: “He wouldn’t be working for me after any of those statements.”
Under the terms of his contract, Mr Hayward is entitled to “current salary and benefits” on his departure, which would be at least £1.04 million.
Last year, he earned a total of £4.56 million – including the £1.04 million salary, a £2.09 million annual bonus, a £852,000 long-term incentive payment and £440,000 from cashing in 220,000 share options. BP is keen to avoid a Royal Bank of Scotland style controversy for “rewarding failure”.
A political row broke out in 2008 when the pay-off for Sir Fred Goodwin, the shamed RBS chief executive, was disclosed. Sir Fred’s pension pot was doubled to £16 million, guaranteeing him £693,000 a year for the rest of his life.
The man who replaced Mr Hayward as the leader of BP’s response to the Deepwater Horizon crisis, Bob Dudley, is expected to be confirmed as the company’s new chief executive.
Mr Dudley grew up in Mississippi and would become the first non-British BP chief executive. In the role, he will have the task of restoring the company’s battered finances and reputation, allowing it to fight off any hostile takeover.
Mr Dudley has overseen an improvement in BP’s fortunes during the Gulf of Mexico crisis. The company has stopped oil seeping from the seabed and is close to completing a relief well that should seal off the leak.
The departure of Mr Hayward is expected to be announced alongside the company’s half-year results tomorrow. BP is forecast to post a pre-tax loss of up to $25 billion (£16 billion), which would be the biggest ever quarterly loss by a British company, after making provisions for the cost of the oil spill.
Source : Telegraph.co.uk