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BP said its former chief executive Bernard Looney stands to lose up to £32.4m due to “serious misconduct” related to failing to disclose past relationships with colleagues.
Looney resigned suddenly in September after BP received allegations about his behaviour, and admitted he had not been “fully transparent” with the board, led by Chairman Helge Lund.
But on Wednesday, BP said it had concluded that Looney had intentionally misled the board and that the oil major had decided to fire him without warning.
The FTSE 100 company said in September that it had launched an investigation into the allegations with support from an external adviser and would make a decision on his remuneration at a later date.
It said its decision to sack Looney three months after his resignation “will result in Mr Looney’s 12-month notice period ending immediately”.
In his first public comments since his resignation last September, Looney said in a statement that he was proud of what he had achieved as CEO and “disappointed with the way the situation was handled.”
“It has been an exceptional honor to serve a great company for over 32 years, not least because of the wonderful people I have had the opportunity to work with,” he said. “As I look to the future, I simply want to wish everyone at BP all the best.”
The maximum £32.4 million that Looney must now forfeit consists primarily of unvested share awards and includes approximately £1 million that he will have to return to the company under a “discretionary clawback”.
BP said 87 per cent of the total was “automatically forfeited” when Looney resigned, but 10 per cent was linked to the board’s decision that his misconduct was serious enough to warrant his dismissal. Another 3 percent was recovered at the discretion of the Board of Directors.
“This is a hell of a reaction,” said Mark Freebairn, head of the board practice at Odgers Berndtson, a headhunting firm. “It shows how seriously the board takes these accusations and wants to make an example of him. Business leaders need to know they can’t lie to the board and get away with it.”
Looney’s departure has shaken the 113-year-old British energy group, raising questions about the number and nature of his relationships in the workplace, as well as his behavior during his presidency of the company.
The allegations that led to his resignation included an accusation that Looney had promoted women with whom he had previous undisclosed relationships, the Financial Times reported.
BP appointed its chief financial officer, Murray Auchincloss, as interim CEO in September and has not yet identified a permanent replacement.
“After careful consideration, the board has concluded that by providing inaccurate and incomplete assurances in July 2022, Mr. Looney intentionally misled the board,” BP said in a statement on Wednesday.
“The Board has determined that this amounts to serious misconduct, and as such Mr. Looney has been terminated without notice effective December 13, 2023.”
BP said the recovery of the awards given to Looney covered the period from July 2022 when the company said he made “misleading assurances” to the board that he had disclosed all past relationships with employees.
The board received the first set of allegations about Looney’s behavior in May 2022, after which he admitted four previous relationships with colleagues and assured the board in writing that he had nothing further to disclose, the Financial Times reported.
The most recent allegations were made in September by a BP whistleblower and identified other relationships Looney had not previously disclosed.
BP added that the decision to dismiss Looney without notice and refund the money was based on evidence indicating that he had misled the board and not as a result of the ongoing investigation into the allegations.
Additional reporting by Angeli Raval in London
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