Former BP boss to lose £32m after “serious misconduct”

December 15th, 2023

Ex-BP CEO Bernard Looney will forfeit £32 million after he was found to have committed “serious misconduct” by the board.

BP’s board concluded that Looney provided inaccurate and incomplete assurances in July 2022 and knowingly misled the board, as such he has been dismissed ending his 12-month notice period.

As a result, Looney will be required to repay 50% of the cash portion of the annual bonus he received in 2022 and will forfeit a portion of his award of shares that vested in August 2023 from the three-year 2020-2022 performance share plan.

Looney will receive no further salary, pension allowance or benefits from the date of his dismissal on 13 December and will not be paid his annual bonus for the financial year 2023.

This use of clawback follows the Financial Reporting Council’s (FRC’s) proposed updates to the UK governance code, which is under consultation.

Under the proposed rules, a firm’s annual remuneration report would have to include a description of malus and clawback arrangements, and how they would be applied.

Companies would also have to disclose if malus and clawback arrangements were used during the reporting period, or during the previous five-year period.

In addition, malus and clawback clauses would have to be included in directors’ contracts and other agreements or documents that relate to director remuneration, to increase their enforceability.

However, in November the FRC announced it was stopping the development of more than half of the 18 proposals set out, making a small number of changes that streamline and reduce duplication.

Minerva Analytics has found very few firms have used clawback in recent years to hold high-ranking executives to account. In 2021, McDonald’s settled its lawsuit with form chief executive Steve Easterbrook, with Easterbrook agreeing to pay $105 million to the company.

Earlier this year, Barclays’ former CEO Jes Staley forfeited his 2021 bonus and other bonus awards, reaching a total of £17.8 million.

BP have been approached for comment.