While I’m on the subject of BP. In the aftermath of the Deep Horizon blowout BP’s CEO Tony Hayward left the company, i.e. was fired, with a severance package of more than $18 million.
Among the wealthy there is some level of earnings at which it’s no longer about the money, at least not about what the money can buy. Money becomes merely a way of keeping score.
Although he’s left BP, Mr. Hayward remains a director of the Corus Group and of Tata Steel.
Actions taken on his watch cost the company of which he had stewardship an estimated $40 billion. We won’t know what the final costs are for decades.
Was Mr. Hayward a winner or a loser? What would the appropriate penalty be for what happened on his watch? None? Is losing the CEO job at BP sufficient penalty?
Er, he’s being sent to Siberia, i.e. a BP outpost in Russia.
“Among the wealthy there is some level of earnings at which it’s no longer about the money, at least not about what the money can buy. Money becomes merely a way of keeping score.”
This, of course, is only true if a definition of wealthy can be agreed upon, a very subjective and personal standard. Further, the money as scorekeeper class is rather sparsely populated.
“What would the appropriate penalty be for what happened on his watch? None? Is losing the CEO job at BP sufficient penalty?”
I’m not sure what you might have in mind. Unless he committed the old “willful misconduct, gross negligence or fraud” dismissal is about the only option. I’m sure he is indemnified absent those actions. And after all, we wouldn’t throw Obama in the slammer because of a muder in Chicago last night, even though he is the presdient, charged with enforcing the laws of the nation.
The reason Boards set up search committees and use professional recruiters is bacause of the importance of the decision. But after that, you pays yer money and takes yer chances.
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I agree that it’s sparsely populated. I think it’s true of the top .1% of income earners and Tony Hayward certainly falls within that category.
BTW, that’s not a rhetorical question in the title. I honestly don’t know whether he won or lost. I can see arguments both ways.
As a general rule when I ask a question it’s because I’m fishing for an answer.
He is a loser, but is he a loser in proportion to the harm for which he is responsible. To that I would say no. With limited lability you cannot match risks with rewards.
Steve
He’s a loser to the extent of reputational loss, which I do think matters for big ego positions. And Drews’s right, this is no doubt covered by the contract which induced him to be the CEO. He guaranteed himself minimum outcomes (barring fraud, etc.). If he personally participated in violating environmental laws, regulations, permits, he could be individually liable, but again BP probably has agreed to indemnity him from any such liability, barring fraud, etc.
I frankly don’t know what he is responsible for here. I assume he was not involved in most of the decisions that led to the incident, some of which may have started before he became CEO and once there was a problem he probable deferred to engineers and lawyers on what to do. He clearly did not exhibit good p.r., which is an important part of being a CEO.
I think the same questions involve Obama’s handling of the spill.
You know what we need? The public stocks. Not the ones you trade, the ones they lock you into leaving your face exposed to the public for a certain period of time. The public is then encouraged to express its opinions of you using the media of rotten fruit, horse excrement, perhaps the occasional stream of urine.
This being a more managed era than the good old days (nay, do not say Dark Ages!) we would have to set some limits, forbidding the use of stones, for example, but allowing more humane instruments — Pampers maybe. Heavy Pampers.
A sentence of six hours in the public stocks would have given Mr. Hayward something to think about as he counted his money. And I suspect it would have sharpened BP’s focus on safety in the future.
The modern day alternative to horse excrement and urine is, of course, Jon Stewart. Whether or not this is a Good Thing depends on your point of view. Unless, of course, you’re Jon Stewart in which case it’s wholly a good thing.
I myself would have sent him to work on an oil rig in the North Sea during the winter months, but then I’m into retributive justice when I’m feeling cranky.
Was Mr. Hayward a winner or a loser?
At his level there are no losers.* He’s too big to fail. Thus an $18 million severance package. As for the rest, there ain’t no justice, so why waste energy thinking about it?
* Save for extreme criminal conduct, such as with Bernie Madoff. But he would have never been caught if the world-wide economy hadn’t gone to shit.
Dave –
Not to be picky, but I was pointing out that those who actually do have enough money that its just keeping score have far more $ than $18MM plus BP CEO’s prior earnings and current Board fees.
Said another way, its such a small handful of people as to be of negligible interest.
After the BP Alaska pipeline disaster I was told by oil industry folks that BP was renowned for skinflint maintenance, and that no one was surprised.
Since then we’ve had three or four more BP disasters.
I doubt that Hayward was personally responsible for “minimal maintenance culture.” Better to target BP with fines on each instance, and until they change their ways.
I agree with jp on that last point. And by the way, make the fines hefty, and wake up the Board and shareholders.