The boardroom turmoil at BP might make for compelling drama, but it certainly tarnishes the reputation of one of the UK’s most prominent corporations.
The departure of former chairman Albert Manifold has been marked by mismanagement and disorder. Adding to the chaos, Manifold released a statement that prioritized confrontation over composure.
This situation has devolved into a spectacle reminiscent of a Punch and Judy show, causing significant harm to BP’s image. It’s also not ideal for Aviva, where the highly-regarded CEO Amanda Blanc serves as the senior independent director at BP.
This controversy distracts Blanc from her critical role at Aviva, a company of great significance to British policyholders, savers, and a multitude of private investors.
Much of Manifold’s response could be likened to the bold, capitalized text used in heated emails, designed to emphasize his points.
Such an aggressive stance does little to defend someone criticized for being overly assertive, as Manifold has been.
Boardroom brawl: BP chairman Albert Manifold was sacked this week amid claims of bullying
Manifold complains about anonymous smears about himself, then makes sarcastic remarks about unnamed BP bigwigs he says have been living it large in swanky offices, gadding around in private jets and chauffeur-driven limos.
His implication is he has been defenestrated for trying to clamp down on such excess, rather than for overbearing conduct.
Manifold, who was paid more than €100million during his decade as chief executive of building materials group CRH, paints himself as a man of the people who takes public transport and makes his own coffee in his small office.
Be that as it may, there were doubts over his selection from the outset.
At the recent annual meeting, he suffered an 18 per cent vote against his reappointment, a very high level of disapproval for a recently-installed chairman.
His move to exclude a resolution from a Dutch investor group on the transition from fossil fuels appeared high-handed to his critics.
It was not only the green fringe who worried that BP appeared to be dismantling accountability for climate change, eroding governance and weakening shareholder rights.
Big investors, including the Local Authority Pension Fund Forum and Railpen, one of the UK’s largest retirement schemes, objected to plans for online-only annual meetings.
Perhaps most perturbing of all, Legal & General Investment Management, one of the largest shareholders, opposed Manifold.
Whatever the rights and wrongs, from a shareholder point of view an ideal chairman is one who is assertive but does not inflame conflicts.
Manifold pointedly praises BP’s chief executive Meg O’Neill and finance director Kate Thomson, but not Amanda Blanc.
The latter, who will be leading the search for a replacement, has won enormous respect as CEO of Aviva, so this is an unwelcome distraction from her main job.
BP and Aviva are two of the most important businesses on the FTSE 100. Most of us have a stake in them through our savings or pensions.
They are major employers and they are part of the fabric of the country. It is hard to see any winners, least of all shareholders, in this tawdry show.
What a mess.
Checking in
Luxury brand Burberry has a long history of very highly paid chief executives.
A couple of decades ago its then boss, Rose Marie Bravo, took home £19million: back then that was even more serious money than it is now.
The current chief executive, Josh Schulman, may be heading in the same direction, though he has a way to go.
He received a package of £4million for last year, including just under £300,000 to cover the costs of moving to London from New York.
Rewards if his strategy succeeds could be much higher.
He could be in line for an annual bonus worth up to 200 per cent of salary with share incentives of up to 450 per cent.
The plan is to revive the brand’s British heritage and to make its goods more affordable, relatively speaking, such as its new Cotswold bag.
These totes, costing £2,000 and featuring the classic check, are a hit in the US.
Sales to Chinese shoppers, which had been quite sluggish, are finally picking up, but are still weak in the Middle East and Europe.
Schulman has plenty to do before he can command rewards on the scale of his predecessors.
