Tony Hayward receives stern words from President Obama in June. (White House photo)
Multiple media outlets are now telling us that Tony Hayward’s departure from BP is likely to be announced this week. Reuters put it this way:
BP Plc has decided Chief Executive Tony Hayward should step down over his handling of the Gulf of Mexico oil spill and his departure could be announced in the coming days, sources close to the company said on Sunday.
BP’s chief executive Tony Hayward has been negotiating the terms of his exit, with a formal announcement likely within 24 hours, the BBC has learned.
Yes, the twit who famously told us that this pesky spill had been such a nuisance that he wanted his life back is about to get just that.
And what a life it will be. Despite being at the helm as the company’s negligence unleashed the worst oil spill in US history and the subsequent loss of almost half the company’s value, Hayward will still be rich beyond the wildest dreams of almost anyone.
CNN gives us the details on Hayward’s likely exit package and current compensation. First, CNN informs us that Hayward won’t get a huge, American-style Golden Parachute. I don’t know about you, but I certainly would settle for the chrome bungee jump or whatever this is that Hayward is getting:
"He will be lucky to get a single year’s salary," said Paul Hodgson, a senior researcher at The Corporate Library, a governance group. "And even that could be mitigated in certain circumstances."
His compensation package — including salary and bonuses — was worth 3.158 million British pounds ($4.87 million), according to the company’s 2009 annual report. He’s also due an annual pension of 584,000 pounds ($901,000).
Additionally, he held more than 535,000 shares in the company as of December 31, which would currently be worth about 212 millon pounds (about $327 million).
That’s right, Hayward will be "lucky" to get an extra lump of almost $5 million to go away, while pulling in a pension of almost a million dollars a year on top of his stock worth $327 million.
Poor thing, I sure hope he doesn’t feel insulted by that paltry package.
If Hayward’s exit package, pension and stock ownership are indeed as reported by CNN, I’d like to nominate his life as the ultimate definition of moral hazard. He will have destroyed the Gulf of Mexico, made billions of dollars worth of stock held around the world go poof and still will walk away with riches beyond imagination. If he is to suffer nothing more uncomfortable than the "humiliation" of losing his job, then there simply is no incentive for other CEO’s to act responsibly in the future.