The Kenmare man who headed up BP until his resignation in September is to forfeit over £32 million.
The oil giant said Bernard Looney accepted he wasn't fully transparent about personal liaisons with staff, following an investigation into his conduct.
BP has now released a statement, which states the board has concluded Mr Looney knowingly misled them, and he must forfeit pay, bonuses, and shares valued at over £32 million.
BP states its board has concluded Kenmare native Bernard Looney knowingly misled them, by providing inaccurate and incomplete assurances in July 2022.
It says this amounts to serious misconduct, and so he’s been dismissed without notice effective of December 13th.
This means Mr Looney will receive no further salary, pension allowance, or benefits from the date of his dismissal; and will not be paid any annual bonus for 2023.
Unvested share awards or stock set aside over a number of years will end.
There’s also a clawback from July 2022, where Mr Looney will be required to repay 50% of the cash portion of the annual bonus paid to him for last year; and he’ll forfeit part of his award of shares given in August this year.
BP says the total maximum value of the potential remuneration that’s been forfeited or clawed back is £32,426,000.
The details are below:
In line with this decision, and consistent with BP p.l.c.’s shareholder-approved remuneration policy, the following will apply to Mr Looney’s remuneration arrangements:
Salary, benefits & annual bonus:
Mr Looney will receive no further salary, pension allowance or benefits from the date of his dismissal; and
Mr Looney will not be paid any annual bonus in respect of the financial year 2023.
Unvested share awards:
Mr Looney’s unvested performance share awards under the Executive Directors’ Incentive Plan (EDIP) – for the 2021-2023, 2022-2024 and 2023-2025 performance share plans - will lapse in full; and
Mr Looney’s unvested deferred annual bonus share awards under the EDIP – from annual bonuses for 2021 and 2022 – will also lapse in full.
In addition, reflecting the decision by the board that Mr Looney should not retain any variable pay relating to service following the date of the misleading assurances he gave to the board, discretionary clawback has also been applied:
Clawback in respect of the period from July 2022:
Mr Looney will be required to repay 50% of the cash portion of the annual bonus paid to him in respect of the financial year 2022; and
He will forfeit 6/36ths of his award of shares that vested in August 2023 from the three-year 2020-2022 performance share plan under the EDIP.
Value of affected remuneration
The total maximum value of the potential remuneration that has been forfeited or clawed back is £32,426,000 based on the assumptions described below.
87% of this value is automatically forfeited as a result of Mr Looney’s resignation with immediate effect on 12 September 2023. 10% results from the board’s decision that he should be dismissed following serious misconduct and the further 3% has been clawed back at the discretion of the board.
The total comprises:
£1,293,000 in respect of salary and pension allowance for the balance of his notice period which would otherwise have expired on 11 September 2024;
£3,258,000 being the maximum potential annual bonus payment for the 2023 financial year;
£24,895,000 being the value of the full unvested performance share awards under the EDIP, a proportion of which would vest at completion of the relevant plan periods, dependent on performance;
£2,030,000 being the value of the unvested deferred bonus awards under the EDIP, deferred from annual bonuses in 2021 and 2022;
£420,000 being 50% of the cash portion of the annual bonus paid in respect of the 2022 financial year, net of tax; and
£529,000 being 6/36ths of the value of the shares awarded from the 2020-2022 performance share plan under the EDIP, net of tax.
