REG - BP PLC - Remuneration for former CEO

BPAnnouncement

13/12/2023 16:30

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RNS Number : 6924W  BP PLC  13 December 2023

 

 

press release

 

 

 

13 December 2023

 

 

Remuneration for former CEO

 

 

Following the 12 September 2023 announcement of the resignation of former
chief executive officer Bernard Looney, BP p.l.c. ('the Company') today
announces the decisions that have been taken in relation to his remuneration.

 

As set out in the September announcement:

 

·       Mr Looney notified the Company on 12 September 2023 that he had
resigned as chief executive officer and from the board of directors of BP
p.l.c. with immediate effect;

·       In 2022 the board sought assurances regarding disclosure of his
past personal relationships with Company colleagues and his future behaviour.
Mr Looney gave these assurances to the board in July 2022; and

·       In his September 2023 notification to the Company, Mr Looney
informed the Company that he had not been fully transparent in those
assurances.

 

Following careful consideration, the board* has concluded that, in providing
inaccurate and incomplete assurances in July 2022, Mr Looney knowingly misled
the board. The board has determined that this amounts to serious misconduct,
and as such Mr Looney has been dismissed without notice effective on 13
December 2023. This decision had the effect of bringing Mr Looney's 12 month
notice period to an immediate end.

 

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.

 

The above values have been calculated using a bp share price of 460.95p, being
the closing price on 12 December 2023, and all values are before tax unless
stated otherwise.

 

The above information is provided in accordance with section 430(2B) of the
Companies Act 2006.

 

 

*          references to the board in this announcement do not
include the Interim CEO, who was recused from all decision making in relation
to Mr Looney.

**        figures have been rounded to the nearest thousand and, as
such, the total may not agree exactly with the sum of the component parts.

***      based on the value of the potential maximum annual bonus payment
for the full financial year, not pro-rated for time.

****   based on the value of all performance shares awarded for the
2021-2023, 2022-2024 and 2023-2025 performance share plans in full (i.e.
assuming performance conditions are met in full) and not pro-rated for time.

 

 

Further information:

bp press office, London: bppress@bp.com (mailto:bppress@bp.com)

 

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