Hayward of BP gets life back
Source: Agencies |
July 28, 2010, Wednesday
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Print Edition
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BP's embattled Chief Executive Officer Tony Hayward will be replaced by American Robert Dudley on October 1, the company said yesterday, as it reported a record quarterly loss and set aside US$32.2 billion to cover the costs of the devastating Gulf of Mexico oil spill.
BP said the decision to replace Hayward, 53, with the company's first-ever non-British CEO was made by mutual agreement. In a mark of faith in its outgoing leader, BP said it planned to recommend him for a non-executive board position at its Russian joint venture and will pay him 1.045 million pounds (US$1.6 million), a year's salary, instead of the year's notice he was entitled to.
"The BP board is deeply saddened to lose a CEO whose success over some three years in driving the performance of the company was so widely and deservedly admired," BP Chairman Carl-Henric Svanberg said in a statement.
Svanberg said the April 20 explosion on the Deepwater Horizon platform in the Gulf of Mexico has been a "watershed incident" for the company.
"BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world's energy needs," he said. "But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board."
Dudley said permanently sealing the well "is my number one focus" and BP would learn from the experience.
"We're going to emerge from it wiser. I think we're going to emerge from it stronger," he told ABC's Good Morning America. "We're certainly going to continue to meet our commitments in the Gulf."
Hayward, who has a PhD in geology, had been a well-regarded chief executive. But his promise when he took the job in 2007 to focus "like a laser" on safety came back to haunt him after the explosion on the Deepwater Horizon rig killed 11 workers and unleashed a deep-sea gusher of oil.
He became the lightning rod for anti-BP feeling in the US, raising hackles by saying "I want my life back," going sailing, and what was viewed as an evasive performance before Congress in June.
In a statement, Hayward said it was right that BP find new leadership.
"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.
On top of the payout, Hayward retains his rights to shares under a long-term performance program which could eventually be worth several million pounds if BP's share price recovers. The stock has lost around 35 percent, or US$60 billion, in market value to around US$116 billion since the well explosion.
Hayward, who will remain on the board until November 30, will also be entitled to draw an annual pension of 600,000 pounds (US$930,000).
Svanberg described Dudley, 54, who was thrown out of Russia after a battle with shareholders in the company's TNK-BP joint venture, as a "robust operator in the toughest circumstances."
Currently BP's managing director, Dudley grew up partly in Hattiesburg, Missippippi, and has so far avoided any public missteps. He spent 20 years at Amoco Corp, which merged with BP in 1998, and lost out to Hayward for the CEO slot three years ago.
BP said the US$32.2 billion charge for the spill led it to record a loss of US$17 billion for the second quarter, compared with a profit of US$4.39 billion a year earlier. It is the first time in 18 years that the company has been in the red.
BP said the decision to replace Hayward, 53, with the company's first-ever non-British CEO was made by mutual agreement. In a mark of faith in its outgoing leader, BP said it planned to recommend him for a non-executive board position at its Russian joint venture and will pay him 1.045 million pounds (US$1.6 million), a year's salary, instead of the year's notice he was entitled to.
"The BP board is deeply saddened to lose a CEO whose success over some three years in driving the performance of the company was so widely and deservedly admired," BP Chairman Carl-Henric Svanberg said in a statement.
Svanberg said the April 20 explosion on the Deepwater Horizon platform in the Gulf of Mexico has been a "watershed incident" for the company.
"BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world's energy needs," he said. "But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board."
Dudley said permanently sealing the well "is my number one focus" and BP would learn from the experience.
"We're going to emerge from it wiser. I think we're going to emerge from it stronger," he told ABC's Good Morning America. "We're certainly going to continue to meet our commitments in the Gulf."
Hayward, who has a PhD in geology, had been a well-regarded chief executive. But his promise when he took the job in 2007 to focus "like a laser" on safety came back to haunt him after the explosion on the Deepwater Horizon rig killed 11 workers and unleashed a deep-sea gusher of oil.
He became the lightning rod for anti-BP feeling in the US, raising hackles by saying "I want my life back," going sailing, and what was viewed as an evasive performance before Congress in June.
In a statement, Hayward said it was right that BP find new leadership.
"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.
On top of the payout, Hayward retains his rights to shares under a long-term performance program which could eventually be worth several million pounds if BP's share price recovers. The stock has lost around 35 percent, or US$60 billion, in market value to around US$116 billion since the well explosion.
Hayward, who will remain on the board until November 30, will also be entitled to draw an annual pension of 600,000 pounds (US$930,000).
Svanberg described Dudley, 54, who was thrown out of Russia after a battle with shareholders in the company's TNK-BP joint venture, as a "robust operator in the toughest circumstances."
Currently BP's managing director, Dudley grew up partly in Hattiesburg, Missippippi, and has so far avoided any public missteps. He spent 20 years at Amoco Corp, which merged with BP in 1998, and lost out to Hayward for the CEO slot three years ago.
BP said the US$32.2 billion charge for the spill led it to record a loss of US$17 billion for the second quarter, compared with a profit of US$4.39 billion a year earlier. It is the first time in 18 years that the company has been in the red.
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