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Former BP CEO Bernard Looney is relinquishing approximately $40 million in severance after the company’s board determined that he engaged in “serious misconduct” by failing to fully disclose his relationships with employees. The revelation led to his dismissal, with the board concluding that Looney knowingly misled them with inaccurate and incomplete assurances in July 2022.
Board’s Determination of Serious Misconduct
In a statement released on Wednesday, BP expressed that, upon careful consideration, the board found that Looney’s actions constituted serious misconduct. The board’s decision to dismiss Looney without notice is based on the acknowledgment that he knowingly provided inaccurate and incomplete assurances, breaching the trust placed in his leadership role.
Bernard Looney: Resignation and Admission
Bernard Looney resigned from his position as CEO in September after admitting to not being “fully transparent” about his “historical relationships with colleagues.” The admission followed allegations in May 2022, when the board, supported by external legal counsel, reviewed claims related to Looney’s conduct regarding personal relationships with company colleagues. The board’s findings indicated that Looney had not breached the company’s code of conduct during this review.
Bernard Looney: Details of the Review and Disclosure
During the review process, Looney disclosed “a small number of historical relationships with colleagues” that occurred before he became CEO. However, despite no evidence of a breach of the company’s code of conduct, the subsequent revelation of Looney’s incomplete disclosure in July led to the board’s determination of serious misconduct.
Impact on Looney’s Compensation
As a consequence of the board’s decision, Looney will not receive any further salary, pension allowance, or benefits. Additionally, he will forfeit his 2023 annual bonus and is required to repay half of the cash portion of his 2022 annual bonus. This forfeiture underscores the gravity of the board’s findings and the financial implications for Looney.
Looney’s Career at BP
Looney, 53, had a longstanding career at BP, spanning just under four years as CEO. He joined the London-based oil and gas company in 1991 at the age of 21, eventually rising to the position of CEO in July 2020. During his tenure, Looney oversaw efforts to transition BP into an integrated energy company with a heightened focus on reducing emissions, aligning with the industry’s evolving priorities.
With Looney’s dismissal, Murray Auchincloss, BP’s Chief Financial Officer (CFO), assumes the role of CEO on an interim basis. Auchincloss, a key figure within the company, steps into the leadership vacuum as BP navigates the aftermath of Looney’s departure and the implications of the board’s findings.
The dismissal of a CEO over allegations of serious misconduct carries significant implications for BP’s corporate image and reputation. The revelation of incomplete disclosure and subsequent forfeiture of severance highlight the importance of transparency and ethical leadership within the corporate landscape. The industry, already under scrutiny for environmental and ethical considerations, faces additional challenges as it grapples with internal governance issues.
The decision to dismiss Bernard Looney and the subsequent forfeiture of his severance mark a striking turn of events for BP. The company faces a critical juncture as it addresses the fallout from the board’s findings and adjusts to new leadership under Auchincloss. The episode serves as a cautionary tale for corporate leaders, emphasizing the paramount importance of transparency, integrity, and adherence to ethical standards in maintaining trust and credibility within the business world.
