BP is set to announce a record loss, having set aside an estimated $25bn-$30bn to cover the costs of the Gulf of Mexico oil spill. The loss is expected to be one of the biggest in British corporate history. The BBC has learnt BP chief executive Tony Hayward will get an immediate annual pension worth about $930,000 when he leaves in October. Mr Hayward is to stand down after sustained criticism of his handling of the oil leak. BP has lost 40% of its market capitalisation since the explosion on the drilling rig off Louisiana on 20 April, which killed 11 workers and triggered the worst oil spill in the US. The company's second-quarter results are expected to reveal a provision for the costs of the clean-up, compensation claims and fines to be paid.
Mr Hayward has been heavily criticised by residents of the Gulf coast and US politicians for his handling of the clean-up and for a series of gaffes, including saying that he "just wanted his life back" and that the Gulf of Mexico was a "big ocean" following the leak. He was also taken to task for attending a sailing event off the Isle of Wight in June. And he was publicly rebuked by members of the House Energy and Commerce Committee last month for "stonewalling" questions at a congressional hearing. BBC business editor Robert Peston said that Mr Hayward's pension entitlement was "bound to be hugely controversial". Our business editor said that because he was leaving by mutual agreement rather than being sacked, the BP board felt it had "to honour the terms of its contract with him". Mr Hayward will receive a year's salary plus benefits worth more than £1m.
His pension pot is valued at about £11m and he will keep his rights to shares under a long-term performance scheme which could - depending on BP's stock market recovery - eventually be worth several million pounds. The man expected to replace Mr Hayward, American colleague and BP managing director Bob Dudley, took over the day-to-day operations in the Gulf last month. Many say that, from a public relations point of view, Mr Dudley has the advantage of being American. He grew up in Mississippi and, according to BP, has a "deep appreciation and affinity for the Gulf Coast". He was the former chief of the BP-TNK joint venture, but was forced to leave Russia in 2008 amid a dispute with shareholders. Mr Hayward began his career with BP 28 years ago as a rig geologist in the North Sea before working his way up to board level. He was a popular choice for the top job when Lord Browne stepped aside in 2007.