A Boardroom Brawl at BP: A Messy Situation
A boardroom brawl at BP might seem like an entertaining spectacle, but it’s a serious blow to the reputation of one of the UK’s most prominent companies. The exit of former chairman Albert Manifold has been poorly managed and chaotic. He has further complicated matters by releasing a statement that is more about bravado than seriousness.
This situation is turning into a Punch and Judy show, which is damaging for BP and not ideal for Aviva, where Amanda Blanc, a highly respected leader, serves as a senior independent director at the oil giant. This debacle is an unwelcome distraction from her main role of managing a company that is crucial for policyholders, savers, and private investors in Britain.
Manifold’s response contains elements that could have been written in bold block capitals, typical of angry emails. Taking this tone does not seem like a convincing defense for someone accused of being “shouty,” as he has been.
Manifold complains about anonymous smears against him, then makes sarcastic remarks about unnamed BP executives he claims have been living lavishly in swanky offices, traveling on private jets, and using chauffeur-driven limos. His implication is that he was removed for trying to curb such excess rather than for overbearing behavior.
Manifold, who earned over €100 million during his decade as CEO of building materials group CRH, portrays himself as a man of the people who takes public transport and makes his own coffee in a small office. However, there were doubts about his appointment from the start.
At the recent annual meeting, he faced an 18% vote against his reappointment, a high level of disapproval for a recently installed chairman. His move to exclude a resolution from a Dutch investor group regarding the transition from fossil fuels was seen as high-handed by critics.
It wasn’t just the green fringe that worried about BP appearing to dismantle accountability for climate change, eroding governance, and weakening shareholder rights. Major 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 concerning, Legal & General Investment Management, one of the largest shareholders, opposed Manifold. From a shareholder perspective, an ideal chairman is assertive without inflaming conflicts.
Manifold praises BP’s chief executive Meg O’Neill and finance director Kate Thomson, but not Amanda Blanc. Blanc, who will lead the search for a replacement, has earned immense respect as CEO of Aviva, making this distraction particularly unwelcome.
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 part of the country’s fabric. It’s hard to see any winners, least of all shareholders, in this tawdry show.
What a Mess
Checking In: Burberry’s Executive Pay
Luxury brand Burberry has a long history of having very highly paid chief executives. A couple of decades ago, its then boss, Rose Marie Bravo, took home £19 million—back then, that was even more significant money than it is now.
The current CEO, Josh Schulman, may be heading in the same direction, though he has a long way to go. He received a package of £4 million for last year, including just under £300,000 to cover the costs of moving to London from New York.
If his strategy succeeds, rewards could be much higher. He could be in line for an annual bonus worth up to 200% of his salary, with share incentives of up to 450%.
The plan is to revive the brand’s British heritage and 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 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.
