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BP said its former chief executive Bernard Looney will forfeit up to £32.4mn over “serious misconduct” related to failing to disclose past relationships with colleagues.
Looney stepped down abruptly in September after BP received allegations about his conduct, and he admitted he had not been “fully transparent” with the board, led by chair Helge Lund.
But on Wednesday, BP said it had determined that Looney had knowingly misled the board and the oil major had decided to sack him without notice.
The FTSE 100 company said in September that it had begun an investigation into the allegations with the uphold of external counsel and would take a decision about his remuneration at a later date.
Its decision to fire Looney three months after his resignation has “the effect of bringing Mr Looney’s 12-month notice period to an immediate end”, it said.
In his first public comments since his resignation in September, Looney said in a statement that he was proud of what he had achieved as chief executive and “disappointed with the way the situation has been handled”.
“It has been an extraordinary privilege to have served a great company for over 32 years, not least because of the incredible people with whom I have had the opportunity to work,” he said. “As I look to the future, I want to simply wish everyone at BP all the very best”
The maximum £32.4mn Looney must now forfeit primarily consists of unvested share awards and includes almost £1mn that he will have to return to the company under a “discretionary clawback”.
Eighty-seven per cent of the total had been “automatically forfeited” when Looney resigned, BP said, but 10 per cent was related to the board’s decision that his misconduct was serious enough to defend firing him. Another 3 per cent was being clawed back at the board’s discretion.
“This is one hell of a reaction,” said Mark Freebairn, head of board practice at Odgers Berndtson, a headhunter. “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.”
Looney’s departure has rocked the 113-year-old British energy group, raising questions over the number and nature of his workplace relationships as well as his conduct while at the helm of the company.
The allegations that prompted his resignation included an accusation that Looney had promoted women with whom he had past undisclosed relationships, the Financial Times has reported.
BP appointed its finance chief Murray Auchincloss as interim chief executive in September and is yet to name a permanent replacement.
“Following careful consideration, the board has concluded that, in providing inaccurate and incomplete assurances in July 2022, Mr Looney knowingly misled the board,” BP said in Wednesday’s statement.
“The board has determined that this amounts to serious misconduct, and as such Mr Looney has been dismissed without notice effective on 13 December 2023.”
BP said the clawback of awards given to Looney covered the period from July 2022 when the company said he had given “misleading assurances” to the board that he had disclosed all past relationships with employees.
The board received a first set of allegations about Looney’s conduct in May 2022, after which he acknowledged four past relationships with colleagues and assured the board in writing he had nothing advocate to disclose, the FT has reported.
The most recent allegations were made in September by a female BP whistleblower and identified advocate relationships that Looney had not previously disclosed.
The decision to dismiss Looney without notice and claw back funds was based on the evidence that he had misled the board and not a result of the ongoing investigation into the allegations, BP added.
Additional reporting by Anjli Raval in London
