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BP CEO safe for now, but pressure on chairman grows
June 18, 2010 / 3:09 PM / 7 years ago

BP CEO safe for now, but pressure on chairman grows

LONDON (Reuters) - BP chief executive Tony Hayward may survive in his job despite a bruising encounter with U.S. lawmakers on Thursday, investors and analysts said, although calls grew for chairman Carl-Henric Svanberg to go.

BP shares gained in London after Hayward managed to fend off attacks by a congressional committee, and as hopes rose its $20 billion oil spill compensation and clean-up fund will cool investor anger. The oil giant has also said it will suspend dividends for the rest of the year.

“Hayward’s performance wasn’t great - but it could have been worse. As a shareholder, our absolute top priority is to see that all energies are being diverted to cap this wretched well,” one top-ten investor told Reuters on the condition of anonymity.

“Our view is that Hayward is doing as much as can be done, but the chairman has not come out of this well at all. He’s hardly been visible.”

Earlier this week, Svanberg was forced to apologize for speaking “clumsily” by referring to those hurt by the company’s oil spill as “small people” following a White House meeting with President Barack Obama.

Another top-20 investor added: ”From my perspective, it is going to be very, very difficult for the chairman to survive.

“The job needs someone who has some kind of credibility on the world stage and the current guy clearly doesn’t have that and that’s the main problem.”

However other shareholders said they were holding fire until the oil well was capped.

“At the moment, we don’t think that any debate on a management change would be particularly helpful. We have no interest in making the situation any worse than it already is,” another top-ten investor said.

BP shares, which have nearly halved since the explosion on April 20, rose 1.35 percent to 364.45 pence at 1405 GMT. Collins Stewart and Societe Generale upped their ratings to “Buy” from “Hold,” saying the share drop since the spill started was so severe that BP now offered good value.

Panmure Gordon analyst Peter Hitchens said: “There’s more pressure on the chairman who has been, sort of, at the inital stages, largely anonymous,” said Hitchens.

“I think at this stage ultimately someone will have to go because it has been a huge embarrassment for BP.”

“Obviously everyone is looking for a scapegoat but it doesnt necessarily have to be (Hayward), it could be the chairman,” said Societe Generale analyst Evgeny Solovyov.

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