BP’s Hayward urged to give up part of his pension
Tony Hayward stands to get £600,000 a year as soon as he goes - that’s more than Fred ‘the Shred’ Goodwin
As expected, Tony Hayward is out of his job as chief executive of BP, taking with him a £1m payoff and his £10.9m pension pot, entitling him to £600,000 a year from the day he officially goes - October 1.
His departure was announced this morning as BP posted an £11bn loss for the second quarter, having set aside £20bn to cover the clean up and compensation costs of the Gulf of Mexico oil spill. Hayward (above left) will be replaced as CEO by the American executive Bob Dudley.
The change is expected to be well-received in the United States, where Hayward has taken the brunt of the public and political opprobrium for the oil spill from BP's Macondo well.
Congressman Edward Markey said yesterday, when it became clear that Hayward would be leaving: "He had to go. He was the one that allowed this company to run up the worst safety record of any oil company in the world."
The New York Daily News led the tabloid calls of "good riddance", describing Hayward as the "most hated and clueless man in America".
But before he disappears, it seems likely the size of his pension will cause consternation among shareholders and the public, even if if he has been at BP for 28 years.
And, not surprisingly, the name Fred 'the Shred' Goodwin has popped up to haunt the beleaguered Hayward.
Goodwin (above right), the last British business chief to be similarly pilloried by the media, went home with an even larger pension - £700,000 a year - when he was forced out of the Royal Bank of Scotland in October 2008.
To be fair to Hayward, Goodwin took the RBS to the wall, not something Hayward is being accused of, even if the Gulf of Mexico catastrophe has led BP to suffer the biggest quarterly loss in British corporate history.
And it was the taxpayer who had to come to the rescue of RBS - again, not the case here.
But the City has not forgotten that Goodwin, under pressure from the Prime Minister and the popular press, eventually gave up a portion of his pension. Just over a year ago, he agreed to a reduction in his annual pension to a measly £342,500.
Today the Lombard column in the Financial Times is the first out of the traps to suggest Hayward takes a leaf from Goodwin's book.
"Perhaps this is the moment for the sort of British self-deprecation that went down so poorly in the aftermath of the Deepwater disaster," writes Lombard editor Andrew Hill. "Rather than risking the accusation that his pension will help pay for an extra coat of varnish on his yacht, Mr Hayward should consider renouncing part of his retirement pot. Consider it a small down-payment on the cost of repainting his peeling reputation." ·
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