The $10.5 billion in scheduled 2010 BP dividends had become political fodder for President Obama, who talked about BP "nickel and diming" the Gulf coast while paying its shareholders a king's ransom. Yet the U.S. government had no legal authority to force BP to suspend its dividend.
Notably, a UBS analyst on the conference call during which BP CFO Byron Grote explained the financial concessions made by BP, asked, "It seems to me that BP agreed to pay $20 billion into escrow and suspended the dividend for three quarters, yet the BP chairman described the meeting as being constructive. So what did you get out of the meeting, from what appears to not be a legal requirement and something people thought was an aggressive stance taken by the U.S. government?"
Now, the severance package that Hayward receives will be subject to the same comparison: the ongoing nickel-and-diming of the Gulf coast in the oil spill claims process, while Hayward walks away with a reported $18 million for quitting after the worst disaster in U.S. oil spill and BP history. When BP releases its earnings on Tuesday, the world is also expected to get its first peek at the amount BP thinks the oil spill will ultimately cost its balance sheet.
With expectations that BP will ballpark oil spill liabilities at $30 billion, the Hayward severance package will be a drop in the oil-spill bucket, even compared to the existing BP dividend and escrow fund. BP has already paid out more than $235 million in claims to Gulf coast residents and businesses also, and spent $4 billion so far in its oil spill cleanup and containment effort.Nevertheless, Hayward's golden parachute has the potential to become a PR gaffe, maybe the last gaffe made by Hayward as BP CEO. There would be something fitting about that, in a sick sense of oil-spill irony. BP shareholders may be none too happy either, about seeing their dividends taken away while Hayward gets paid for failure.
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