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No bonus for BP managers overseeing fatal oil-well

04 March 2011 08:10 (UTC +04:00)

Baku - APA-Economics. The board of BP PLC, criticized for its handling of the Gulf of Mexico oil-well disaster, denied bonuses to three top executives responsible for operations in the region and promised steps to keep better tabs on the oil giant’s management, The Wall Street Journal reported.

Former Chief Executive Tony Hayward, former head of exploration and production Andy Inglis and current CEO Robert Dudley will receive no cash bonus for 2010 and no shares under a long-term compensation plan, BP said.

Separately, the board said it would make more frequent site visits, has expanded its safety committee and expects to play a greater role in crisis planning. But critics said the remedial efforts don’t go far enough.

"The board responded strongly during the crisis,’’ but "there remains much for the board to do,’’ BP Chairman Carl-Henric Svanberg said in the company’s annual report, which includes a board evaluation.

BP’s oil and gas production operations will be the subject of additional site visits by the board, which will also seek "detailed briefings on significant operating activities," according to the report. Retired U.S. Navy Admiral Frank C. "Skip" Bowman, one of five new outside directors chosen since February 2010, has joined the safety committee. He served on an independent panel chaired by former U.S. Secretary of State James Baker that looked into a deadly accident at a BP refinery in Texas and found safety deficiencies.

Still, the actions failed to appease activists and governance experts. Some institutional investors had previously criticized BP directors for being too passive in their response to the oil spill

The BP board could improve its oversight by issuing "a detailed report on process safety management, staffing, inspections and maintenance to prevent to prevent future accidents,’’ said Brandon Rees, deputy director at the AFL-CIO’s Office of Investment in Washington, D.C..

BP may need to find a new chairman to satisfy discontented shareholders, said Stephen M. Davis, head of the Millstein Center for Corporate Governance and Performance at Yale University’s School of Management. The board report "may not be enough to overcome [their] deep skepticism,’’ he said.

The Deepwater Horizon disaster cost Mr. Hayward his CEO’s position, but Mr. Svanberg survived, even though his performance was widely perceived as lackluster during the crisis. Mr. Svanberg exacerbated BP’s public-relations woes by expressing sympathy for the "small people" on the Gulf Coast last June.

Separately, BP said oil production in its two main deep water areas, the U.S. Gulf of Mexico and Angola, fell by 15% in 2010. The Gulf of Mexico production fell to 338,000 barrels from 387,000 barrels a day in 2009. In Angola, where BP has suffered a number of technical problems, production slid to 170,000 barrels from 211,000 barrels.