- BP boss Looney resigns over lack of transparency about personal relationships with colleagues
- CFO to step up on an interim basis
- Analyst warns ‘uncertainty could weigh on the stock’
For now the market seems to be taking news of the departure of BP (BP.) CEO Bernard Looney largely in its stride.
Looney, who had been with the company since he was 21, resigned amid a lack of transparency over historic ‘personal relationships’ with colleagues, something which is subject to investigation by legal counsel.
He had served as the boss of the energy giant for nearly four years having started at the beginning of 2020. Initially he placed a big emphasis on the energy transition but then appeared to dial back ambitions here amid criticism from shareholders.
The relatively short-lived tenure makes it hard to judge his legacy.
He achieved a total return of nearly 30% over the course of his tenure according to SharePad data. This is better than the 14.4% from the FTSE All-Share over the same time-frame but compares unfavourably with main counterpart Shell (SHEL) whose own total return for the period stands at more than 40%. BP is well short of the performance of its big US peers too.
While a successor is sought, chief financial officer Murray Auchincloss will act as interim CEO. BP shares were down 0.8% at 518.8p.
WHERE DOES LOONEY'S DEPARTURE LEAVE BP?
Berenberg analyst Henry Tarr said: ‘Given his relatively short tenure, and the unexpected nature of his departure, there is no clear succession plan immediately in place.
‘As the search for a new CEO begins, it is thus uncertain whether the next leadership team will stick with the existing plans or change tack, and until there is greater clarity on the management team and strategy, this uncertainty could weigh on the stock.’
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AJ Bell investment director Russ Mould commented: ‘Assuming this is largely the end of the matter, even if an investigation by legal counsel remains ongoing, and chief financial officer Murray Auchincloss can lead the company through the transition to a new leader, then little harm may be done to the business.
‘The nagging worry is that this is the tip of an iceberg and is reflective of wider problems with BP’s workplace culture. Given this uncertainty, it may be a few weeks before shareholders are sitting comfortably again.’
Disclaimer: Financial services company AJ Bell owns Shares magazine. The author of the article (Tom Sieber) and the editor of the article (James Crux) own shares in AJ Bell.
