Tony Hayward, the embattled BP chief executive, will collect a pay and pension package worth £11.8 million when he falls on his sword this week.
The oil company hopes that his departure will draw a line under its role in the Gulf of Mexico disaster. Five days after The Times revealed that Mr Hayward was to quit, the BP board is due to meet today in London to hammer out the terms and timing of his exit.
The news, greeted with delight in the US, may be formally announced later today before the company reveals what is expected to be the biggest quarterly loss in British corporate history tomorrow — estimated at up to $13 billion (£8.4 billion) — because of provisions made for the spill.
In a statement to the stock exchange this morning BP said that a decision would be made at a Board meeting this evening ahead of the announcement of the oil group’s second quarter results tomorrow. “Any decisions will be announced as appropriate,” the company said.
Mr Hayward, 53, has worked for BP for more than 28 years. He will receive a single payoff equivalent to his annual salary, which stood at more than £1 million in 2009, plus a pension pot valued at £10.8 million at the start of the year. This will ensure that he receives £584,000 a year when he is 60.
More than 40 per cent has been wiped off the market value of BP, once Britain’s biggest company, from £125 billion to £75 billion, since the disaster. This has devastated the income paid to the estimated 18 million British investors who hold shares in BP, either directly or through pension funds. The company usually pays £1 in every £7 of the dividends from FTSE100 companies but has been forced to suspend payouts worth £5.4 billion.
Mr Hayward, who has led BP since Lord Browne of Madingley left in 2007, is expected to remain until September, when he will hand over to Bob Dudley, his likely American successor. He is said to be going by mutual consent to help to rebuild BP’s reputation after the April 20 disaster, which killed 11 workers and caused America’s worst oil spill.
His exit follows a string of gaffes over the accident, including saying that he wanted his life back, and that the environmental impact of the spill would be “very, very modest”. Last month, after a mauling by US senators, he went sailing while the Deepwater Horizon well was still spewing oil.
Edward Markey, the Democrat who has led attacks in Congress on BP, said that Mr Hayward’s “aloof, uninformed leadership” would not be missed. “While it’s now happy sailing for Tony Hayward, rough conditions will persist in the Gulf of Mexico for years to come because of his leadership,” he said.
Until the accident, Mr Hayward, who joined BP after studying geology at the University of Edinburgh, had been hailed in the City for stripping out costs and boosting profits.
News of his exit came as BP risked a new public relations fiasco by starting deepwater drilling in the Sirte basin, off the coast of Libya. US senators are also investigating BP’s alleged role in the release of the Lockerbie bomber to secure the $900 million deal.
Questions also persist over the future of BP’s Swedish chairman, Carl-Henric Svanberg. He has been criticised for failing to provide leadership during the crisis and for going yachting off Thailand after the accident.
Mr Hayward is not expected to receive his performance bonus for this year, which last year boosted his pay by £2 million. He will also give up 546,000 share options and a maximum of 2 million shares under an incentive plan, now worth an estimated £8 million.
A BP spokesman insisted that Mr Hayward continued to have the full support of the company’s directors.