BP (BP.L) CEO Bernard Looney resigned on Tuesday with immediate effect after less than four years in charge for failing to disclose prior personal ties with coworkers, the firm said.
The business announced that CFO Murray Auchincloss would serve as temporary CEO.
Looney, 53, became CEO in February 2020 with a strategy to revamp the 114-year-old British energy behemoth to attain zero net emissions by 2050 and spend billions on renewable and low-carbon electricity.
Looney’s surprising retirement followed suspicions of intimate ties with coworkers, triggering an inquiry.
That follows May 2022 board investigations on similar charges. While reviewing, Looney acknowledged “a small number of historical relationships with colleagues prior to becoming CEO.”
No code of conduct violation was identified, and Looney assured the board “regarding disclosure of past personal relationships, as well as his future behavior.”
On Tuesday, Looney resigned from BP’s board after admitting he didn’t disclose all affiliations.
Before the FT announced Looney’s departure, London BP shares rose 1%. New York-listed shares slid 1.5% to the day’s lows following the announcement.
REINVENTING BP
Auchincloss, 52, became CFO in July 2020 and has helped Looney lead the firm through COVID-19, a fast withdrawal from Russia after the invasion of Ukraine last year, an energy price shock, and a worldwide cost of living crisis.
Canadian Auchincloss began his career as a financial analyst with Amoco before BP bought it in 1998. He has held numerous positions since then, including BP’s North American Gas CFO.
BP reduced its 2030 hydrocarbon production cut to 25% from 40%, still the most drastic drop among major oil firms this decade. BP has failed to persuade investors its non-hydrocarbon operations can provide competitive returns.
BP’s shares have underperformed Shell (SHEL.L), Chevron (CVX.N), and Exxon Mobil (XOM.N) during the last three years. After a record $28 billion in 2022, BP’s second-quarter earnings fell 70% to $2.6 billion, enabling the oil giant to raise its dividend by 10%.
It was unclear whether Looney’s departure would impact strategy. Morningstar analysts noted that “BP could theoretically roll back its transition plans further” depending on the incoming CEO.
But if the board likes the present course, despite the trailing stock price, they will likely choose someone who keeps BP on track.”
Although BP’s emissions remained constant, Looney’s 2022 pay package more than quadrupled to $12 million because of rising energy costs.
BP stated, “no decisions have yet been made in respect of any remuneration payments to be made” to Looney. Looney succeeded Bob Dudley, who led BP following the 2010 Deepwater Horizon catastrophe.
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