CEO: BP will make good on $10 billion in profit payouts to shareholders, despite spill

By John Byrne
Friday, June 4, 2010 9:28 EST
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BP’s shareholders may receive more this year from the company’s coffers than those affected by the spill in the Gulf of Mexico will receive in their lifetime.

BP CEO Tony Hayward has indicated that he will go ahead with massive dividend payouts to shareholders in the aftermath of the worst oil spill in US history. $10 billion in payouts are scheduled for this year. The cost of the spill has been estimated in the tens of billions, but ExxonMobil only ended up paying a $507 million settlement for the 1994 Exxon Valdez spill after 20 years of appeals.

BP’s dividend ratio is now at 7.4 percent per year, more than twice the average payout of companies listed in the S&P 500. This means that US investors who hold BP stock effectively earn 7.4% interest on their shares — more when US tax law is taken into account — in addition to any gains or losses as a result of price shifts in the stock’s value.

Democratic senators Charles Schumer (D-NY) and Ron Wyden (D-OR) wrote to BP’s CEO on Wednesday asking them to delay dividend payments until a reasonable estimate can be reached for the cost of the spill’s cleanup.

“We find it unfathomable that BP would pay out a dividend to shareholders before the total cost of BP’s oil spill clean-up is estimated,” the senators wrote.

“While we understand the need to reassure shareholders that the disaster in the Gulf will not substantially impact BP’s long term financial health, we are concerned that such action to move money off of the company’s books and into investors pockets will make it much more difficult to repay the U.S. government and American communities that are working around the clock to stem the damage caused by this devastating oil spill,” they added.

On the opposing side are some British cities and British pension funds, which depend on dividends like BP to pay retirees.

“BP’s dividend is of crucial importance to the City and to the pensions of millions who depend on payouts from profitable companies to boost their retirement funds,” the Guardian noted Friday. “Together with rival Shell, BP accounted for 25% of the total dividends of £50bn paid in the UK market last year. Any cut in the dividend could result in investors selling BP shares, further weakening the company, which has lost nearly 30% of its value since the disaster began.”

If BP cuts its dividend, its share price would almost certainly fall further. The company has lost nearly 30% of its market value since the spill occurred Apr. 20. The decline has shaved tens of billions of the firm’s market capitalization.

As of Friday morning, BP shares traded slightly higher in premarket trading on news that Hayward planned to keep the dividend intact.

John Byrne
John Byrne
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  • marblex

    Yeah and they'll pay it with OUR FUCKING TAX DOLLARS — you wait and see.

  • RepublicansAreADisease

    I wonder how the pensions of all them dead birds are holding up….

    Pay the dividends to the people in the Gulf, and pay the share holders “widows and orphans” with the assets of ALL the BP Executives estates. You know, the executives that couldn't wait to pull the rig and get to the black gold.

    http://www.RepublicansAreADisease.com

    The “total” damage caused by this spill may be a trillion dollars. What is a coral reef worth? What is half the coral reefs in the world worth? What is the damage from billions of gallons of acid rain going to cost. The “pensions” should have been investing in green companies, instead of companies who's normal operations account to nothing more than murder, and high stakes gambling with the future of the entire planet.

  • consumetheconsumer

    thought of the day . . . involuntary receivership . . . nationalization . . . with a direction that the company's single focus be fixing that which it broke. this isn't some game, their gross / criminal negligence threatens an entire region of the United States.

    An. Entire. Region.

    Not just one town, not just one beach, not just one fishing ground, not just one city, not just one a state.

    An. Entire. Region.

    And the CEO wants to 'make good' . . . receivership will help focus the company's attention where it should be.

  • http://forums.thepoliticalasylum.com Eddie H

    What a treat for the 4th of July Holiday. We get screwed so the British can make money.

  • dennycrane

    Of course they will. It's the world where bad behavior and bad mistakes bring in huge rewards. Bizarro World.

  • Corporate Indu$trial Complex

    .
    LIBERTARIANS: TRUE FREE MARKETS WORK–BESIDES, OIL IS RISKY–AND WE'RE ALWAYS RIGHT
    .

  • dennycrane

    BP has stopped civilian airplanes from flying over the oil volcano.

  • angry seabird

    gotta protect that share price. gotta make sure poor bp doesn't loose more of it's value. gotta protect the company!

    these people should be tarred, feathered and left to stand on one of the off shore rigs. disgusting.

  • starvapor

    The government should seize all money/profits/dividends generated by the Deep Water Horizon well to guarantee that all damages related to the leak will be paid out of these funds.

  • wjcormier

    This is Bull$hit! BP is doing this because their stock is falling and they don't know how much they will have to pay out for damages and fines. The US should file for a TRO to stop this action immediately. BP is attempting to liquidate cash so if they are taken over by another company because of their low stock price and the coming fines, they will not have the cash reserves to pay it. Anyone should be able to see through this nonsense and if the government doesn't try and stop it they will be complicit in defrauding the American taxpayers.

  • Corporate Indu$trial Complex

    .
    BP NOT TOO WORRIED ABOUT GULF SPILL, AS EXXON HAS NEVER PAID PUNITIVES FOR VALDEZ
    .

  • consumetheconsumer

    Nothing has been generated by the BP Deepwater Horizon well except a lot of pollution – and debt to the companies involved. I'll agree with you that the government should immediately seize all assets of BP, Transocean, Haliburton and any of the other companies involved. They can be held in trust for the public good, i.e. the massive clean up.

    Shareholders, well, that's the price of adventure. If you don't like it, join the cleanup and save your company some money.

  • Democratic Socialist!

    “TOO BIG TO LEAK!”

  • Mike

    Pay their city bills? Fuck that. They put money in the market. Market fucked up because you decided too invest in a scummy industry. Now you are complaining that the stock you bought is falling? Please. Where are the tears when they all made fortunes?

  • DesertSun59

    No one should be surprised by this. It was totally expected. Here's another thing to NOT be surprised about: Tony Hayward will receive a RECORD BONUS this year.

  • http://profiles.yahoo.com/u/MMZ2CADZBLBKHLYZW7N7DDWU2E Elprimo

    With the Gulf Coast dying of oil poisoning, there's no space in the press for British Petroleum's latest spill, just this week: over 100,000 gallons, at its Alaska pipeline operation.

    So much for our corporate bought press. Tell the truth about US corporate misdeeds and they'll lose their advertising dollars.

  • yaright

    Jesus! Why is no one listening to me

    String up Tony Hayward by his thumbs over a burning oil rig so he can get back to his normal life being SATAN.

    It's so simple!

  • emkay

    “BP's shareholders may receive more this year from the company's coffers than those affected by the spill in the Gulf of Mexico will receive in their lifetime.
    BP CEO Tony Hayward has indicated that he will go ahead with massive dividend payouts to shareholders in the aftermath of the worst oil spill in US history.”

    8 years of Bush's lies,and criminal enterprise,including war crimes. Now just over a year into Obama. No sign of “Change you can believe in” or “Hope”. Biz as usual and now this BP fiasco!
    My question both to myself and America is-Just how much more of this arrogant right under our noses behaviour are we going to take? Bush and his band of Fascists are still walking around free. Limbaugh,Beck,Coulter etc. are allowed to incite hatred,paranoia and violence.Both this administration and the last have done absolutely NOTHING for “We The People”. So what's it going to be??
    http://www.youtube.com/watch?v=_siH5wJTJ4E

  • Gashole

    There should be NO PAYOUT to anyone associated with BP.
    The shareholders should be penalized for their company's criminal behavior.
    Where the hell do these parasites come off expecting a dividend.
    Guess what…. you made a bad financial decision …Tough!
    The environment loses, shareholders lose it's as simple as that.
    You don't like it shareholders, too bad.find new cleaner investments.
    Profiting from ecological disasters in “OBSCENE” and unconscionable.
    BP should be barred from any and all payouts until this nightmare is contained and cleaned.

  • Madprogressive

    No one is really surprised by this right. If you are, you must've been born yesterday, because you haven't been paying attention with these institutions. No one really believes BPis going to pay for this disaster do you! This payout clearly shows BP doesn't beleive it will pay the full freight for this disaster.

  • ericroded

    I sure hope my IRA has some BP in it.

    I know it's got Supermax in it.

    And screw Florida! I can always retire to Santa Barbara and watch their oil platforms in my old age….

  • NadePaulKuciGravMcKi

    pay out all the profits before bankruptcy
    leave the little people holding the bag ~

  • oktoss

    Memo to shareholders*: BP regrets the loss of jobs and high quality, moderately-priced seafood because of its Gulf Of Mexico. BP could have done more during the rig's construction phase and pre-startup but that is costly. BP's bottom line is BIG profit at all costs. Bp tried dishonestly to get itself pre-absolved of this mess and has stalled as much as it can but it appears that BP may be forced to spend zillions of dollars to clean up its mess. Therefore BP has rounded up $10 billion and we're clearing it out of here as a dividend and paying it to you instead of being honest and saying that BP lost your money for you in an oil spill cleanup project. We'll dump as much of this as possible on the American taxpayer as we bugger off to somewhere else.

    BP also understands the importance of getting this money back to you so that you can have your sea food flown in to you – fresh daily.

    *BP is yet another corporate protector of the US Uber-wealthy

  • oktoss

    BP has us by the short hairs and they know it. If our government investigates and finds evidence of criminal activity, BP's lawyers will stall until after the next election, then proceed to buy a new government via political contributions.

    The US Supreme Court has pre-approved this.

  • j r

    The rats getting what they can steal from BP while there's still something left to steal. BP should be seized by the government and all it's top execs jailed with no bail.

  • jivetalkin

    The U. S. Government, needs to stop all of BP's distribution of profits to their shareholders!!

  • overdoneputaforkinit

    I've noticed when corporations are making lots of money in the course of their crime, they never pay much. It's like the legal system itself, “We make tons of money off of your crime.” And when corporations are making tons of money off of their own crime, the legal profession respects that. BP is showing how much money it makes to the legal profession, and the legal profession (which includes Congress) will leave BP alone.

  • pb

    Obama is a big corporate pussy lapdog

  • mcQuaidLA

    I'm sorry. I don't care about the shareholders at the moment. You invest knowing that your investment could fail. In this case, investment in BP HAS failed, at least for now. And once again, those with the resources to invest will be made whole first, and those whose lives are destroyed because of corporate negligence are SOL.

  • banner

    Sadly, the SCOTUS has sold us all out. I'm still appalled by the recent ruling on Miranda Rights…………W T F ! !

    Oktoss is very near to the truth. The big boys are not only getting away with it they rub our noses in it while they do it. Sux. We're doomed. Keep ur guns greased.

  • Gabbyn

    Isn't this double speak for paying BP executives, who typically own the largest shares in the company?

  • madcatmatt

    The british are coming and this time they are wearing black. BP's accets should be freezed and they should be kicked out of the country. The core of army engineers should seal the leak and an investigation should be done by a non government/non corperate team. Then if anyone is found to be criminally liable they should be prosecuted and sent to prison if found guilty by jury trial.

  • Skeletor

    Confiscate it all.

  • boo who

    Why the hell shouldn't BP pay its dividend? Many (if not most) of BP's shareholders are ordinary workers trying to build their retirement funds. Many more are already retired and depend on investment income for their living expenses. Many municipal and educational institutions depend on their investment income.

    You're all acting like a bunch of uninformed, knee jerk extremists being manipulated by your liberal media outlets. You're all like the socialist version of the tea-baggers. Okay, maybe not that bad…

  • boo who

    You do realize that BP is an ENGLISH corporation?

  • http://athousandpix.blogspot.com/ KWillow

    The interconnected international corporations that run the US and Israel, and are working on the rest of the world are going to go too far in there unrepentant, blatant criminality -and veyr soon, I think.

  • http://athousandpix.blogspot.com/ KWillow

    WRONG. It is an international corporation, as they ALL are these days. A huge number of Americans own their stock, and their boards of directors are of all nationalities,and sit on just about every other corporate board, voting themselves huge bonuses right and left.

    Check out the blog Muckety: “Two CONNECTED to Fail”

    http://news.muckety.com/2010/05/07/too-connecte…

  • http://athousandpix.blogspot.com/ KWillow

    Obama can Nationalizing all of BPs American holdings. The president of the USA has that power.

  • reyrey

    Has anybody heard if there has been a national survey of whether BP gas stations are being affected at all by Oil Gate?

    It's kind of hard to blame a station owner, but then boycotting these stations would really give BP a major migraine headache.

  • http://site-press.com/gulf-oil-spill-news/oil-spill-news/ceo-bp-will-make-good-on-10-billion-in-profit-payouts-to/ CEO: BP will make good on $10 billion in profit payouts to … | The Gulf Oil Spill News Blog

    [...] View full post on British Petroleum – Google Blog Search [...]

  • http://bluebear2.blogspot.com/ BB2

    Seize their bank accounts to pay for the damage they have done and are continuing to do.

  • http://www.r4ikarte.de/ acekard

    Have you ever thought how else will the board of directors and the executives get their cut of the profit in case BP sinks..

  • Turnip

    Their system has created a playing field where there is no safe haven, where neither the individual nor the collective have a safe haven from the confiscatory evils of inflation. So, we end up, individually, and collectively held hostage to the same corporate interests that also buy up our 'representation' in Congress.

  • Mooftown

    It's gonna cost way more than 10 billion to clean up this epic fuck up. Hope you got plenty left over

  • Turnip

    If your mobile home rolled down the hill and through my house, I'd want to know that my restitution would come in first position to your NASCAR subscription.

    Okay, maybe not that bad…

  • http://moneyhaitohhoneyhai.com/2010/06/05/ceo-bp-will-make-10-billion-profit-payout-to-shareholders/ CEO: BP will make $10 billion profit payout to shareholders | Money Hai Toh Honey Hai

    [...] By: No Gold Standard [...]

  • No Gold Standard

    The Austrian School of Economics is a fucking joke. Look around you, and tell me free markets work..duh! The Gold Standard is a horrible idea. Just look back into history and see. Adam Smith was a government slandering retard. Support the American Monetary Act. Goto http://www.monetary.org and check it out.

  • name

    No paying dividends on time would clearly say they have cash flow problems already. That would initiate investors panic and sink it in a day.

    They will have cash flow problems anyways, as more money needed for Florida now.

    Give it 2-3 weeks, and they are toasted.

  • dnamj

    Nope. Seize the assets now.

  • I KNOW IT!

    There should come to be a point in government when the United States' allies [Israel] needs to confess of it's wrongdoings.
    Israel thinks they are above the law, & as long as the U.S. allow them to be they will always stir havoc in the Middle East. Israel is the reason for this “Holy War;” they need to take responsibility, withdraw their domination from the Gaza & reach peace towards Palestine (with all the other enclaves -from nations-that live in Jerusalem).
    Again, once Israel ceases their arrogant power in the Holy Land, the Muslims &(their freedom fighters/terrorists) just may be able to co-exist…. “PEACE NOT APPARTHEID.” Live and learn! Israel is not above the law!!!

  • Steve Holcombe

    BP appears to be mollifying its shareholders while BP still has the cash and in advance of what presumably will be a bankruptcy filing at some date certain. A bankcruptcy court would never let BP make these kinds of payments to shareholders so now is the time to shovel the money out the door. This isn't “unfathomable”. This is the way of capitalism. For U.S. Senators say that is is unfathomable is either disingenous or, even more alarmingly, reveals a basic mis-understanding of how the real world of capital actually works. Having said all this, the BP oil spill is for me every bit as painful as 9/11.

  • http://www.topix.net/member/profile/hadenoughlehighvalley Hadenough

    The real reason why they will liquidate these billions is because the major shareholders can't “afford to fail”, lol. Same old game, the rich will get richer off of our tax money that will be unlawfully used to clean this up. The sickening part is that it is the American SHEEPLE that allow their government to do this. We deserve this as long as we will put up with it. STOP complaining and DO something about it!

  • Investigate-NWO-globalists

    How much longer are we going to let these fascists/corporatists destroy our country???

  • unfortunate accident

    Did I miss something? 3 months ago, Obama made it clear that he wanted more deep water drilling in the gulf. Now, because of this accident (a rather large accident), time to shut-up shop! Why for the first 3 weeks of this crisis did the government sit back, do nothing to help…all obama did was speak out about this accident. If this government would have bee proactive, right away, this accident could have been scaled by…big time! All think it is rather funny that BP is getting all the heat on this, when they didn't even opperate the rig.

    Finally, Nationalizing…LOLOLOLOLOL…Any of you who think this is even a slight possibility, you are a moron!

  • John

    The best way to stop the oil is by dropping politicians, propagandists, and big business types in the muck. They will sink and eventually stop the spill at minimal cost to the tax payer.

  • http://www.facebook.com/gbardin1 Greg Bardin

    The chemical dispersant is as dangerous as the spill. Surfers reporting burning eyes and headaches in PensacolaFL.

  • Mamajill

    Type your comment here.How

  • Mamajill

    How can you tell when a BP representative is lying? When their lips are moving.

  • http://evans-politics.com/did-bp-purposefully-cause-the-deepwater-horizon-spill-to-make-higher-profits-from-higher-gas-prices.html A BP Conspiracy Theory | Evans Politics

    [...] the fact that they should be throwing all available resources at the Gulf oil spill right now. See CEO: BP will make good on $10 billion in profit payouts to shareholders, despite spill, The Raw Story, June 4, 2010, by John [...]

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