Looney resigned as CEO in September after admitting to the board he had not been fully transparent about disclosing past relationships with colleagues when asked about the issue in July, but agreed to stay on through a transition period. The board later concluded that Looney knowingly misled them and committed serios misconduct, and voted to dismissed him immediately on December 13.
BP’s Compensation Clawback
Looney will receive no more salary, pension allowance, or benefits and will not get an annual bonus for 2023. The company is letting his performance share awards from 2021 through 2024 and annual bonus share awards for 2021 and 2022 lapse in full. Looney’s actions have also resulted in a substantial remuneration clawback. BP confirmed a £32.4 million ($40.53 million) reduction in his compensation package. Of this, 87 percent relates to the initial resignation, 10 percent stems directly from the board’s misconduct ruling, and the remaining 3 percent falls under the board’s discretionary authority.
“The company has strong values and the board expects everyone at the company to behave in accordance with those values,” BP said at the time of Looney’s resignation. “All leaders in particular are expected to act as role models and to exercise good judgment in a way that earns the trust of others.”
Looney expressed disappointment with the situation’s handling in a public statement. “I am disappointed with the way this situation has been handled,” Looney said in a statement shortly after his dismissal.
BP’s Leadership Void
With Looney’s departure, BP finds itself navigating a leadership transition. Murray Auchincloss, previously chief financial officer, now serves as interim CEO while the board seeks a permanent replacement targeted for selection in the first quarter of 2024. Meanwhile, Chairman Helge Lund leads an ongoing investigation, assisted by Fairfields law firm, to determine whether Looney’s undisclosed relationships breached company policy.
This incident follows a recent trend of executive pay clawbacks due to misconduct in major corporations. In 2016, Wells Fargo CEO John Stumpf forfeited $41 million in stock awards for a sales practices scandal, and two years ago, McDonald’s former CEO Steve Easterbrook returned $105 million in compensation to settle a lawsuit concerning alleged misrepresentations.
BP says its decisive action underscores the company’s commitment to transparency and accountability within its leadership. This episode also highlights the complexities involved in navigating sensitive personnel matters at the highest levels, particularly when trust and disclosure come into question. 
Joseph McCafferty is editor & publisher of Compliance Chief 360°