Royal Dutch Shell Plc  .com Rotating Header Image

Why BP’s Hayward Is A Goner

Christopher Helman is an Associate Editor at Forbes, based in Houston

President Obama is looking for “ass to kick” and says that if BP Chief Executive Tony Hayward worked for him, he’d have been fired already.

Politicians are out for blood, have their eyes on BP’s cash and are outraged that BP hasn’t yet moved to slash its dividend payments, expected to be on the order of $10 billion this year.

BP shareholders have let it be known that the dividend is sacrosanct, that without it they would likely jettison their BP shares, which have already fallen 40% since the Deepwater Horizon exploded.

Hayward reportedly said in 2008, “I pay taxes so I don’t go to jail. I pay dividends so I don’t get fired.”

So what can Hayward do to satiate his enemies while still keeping shareholders happy?

Don’t be surprised if he falls on his sword.

Hayward, before this disaster, seemed to be doing an all right job turning BP around. But now he has no credibility left. Since the spill began, he’s made gaffe after gaffe, telling Forbes three weeks ago that he’s sleeping well at night and that he thought BP’s reputation might ultimately be bolstered by how the company responded to this event.

That’s probably not the case anymore, in the wake of failed containment domes failed, top kills that didn’t and a diamond saw getting stuck cutting the riser.  Even as the siphoning seems to be working well so far, today came the news that BP didn’t have enough ships on hand to hold all the oil being siphoned.

Meanwhile, as the New York Times and others have pointed out, Hayward has become the company’s worst spokesman: denying the existence of underwater oil plumes, blaming oil spill workers falling ill on food poisoning and telling an interviewer that he’d “like my life back.”

Hayward would take a lot of pressure off BP if he resigned. He’ll make Obama happy. And his ouster will provide the cover that BP needs to tell shareholders not to expect any more dividend payments for the rest of the year.

As for the company, BP can name its recently appointed Chairman Carl-Henric Svanberg as interim ceo while the board decides on who ultimately gets the job. Svanberg is a good placeholder. The former chief of Swedish cell phone giant Ericsson is a BP outsider, so he’s not tainted by the error-prone ways of John Browne and Hayward’s tenures.

Who might replace Hayward in the long run? Irish betting site Paddy Power has a bunch of insiders as the favorites to take Hayward’s job, led by Iain Conn, the head of refining, at 3/1 odds and BP’s U.K. chief Peter Mather at 4/1. Svanberg is at 10/1.

Disgraced former chief John Browne is inexplicably at 7/2; there’s no way he’s coming back. In fact, it would be wise of BP’s board to find an outside to be Hayward’s permanent replacement. Someone like Malcolm Brinded, Royal Dutch Shell’s head of exploration and production. He’s at 14/1 odds, and because Shell’s Anglo-Dutch culture is more similar to BP’s, Brinded would make more sense than John Carrig, chief operating officer of ConocoPhillips, who is likely too… American, and too entrenched in Houston to move to London.

At 40/1 odds is Total’s Chief Executive Christophe de Margerie. He would only get the job if Total moved to buy out a weakened BP. Does anyone really think the British would let the French do that?

Paddy Power’s customers are betting that something’s going to give. The odds that Hayward is still in his job on January 1: a meager 5/4. If BP doesn’t ease Hayward out on his own, trust that the Obama administration will find a way to make it happen.

What should BP do? Who should be the next CEO? Let us know your thoughts.

This website and sisters,,,, and, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.