Arco chairman in line for $28m pay-off

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The Independent Online
THE CHAIRMAN of Atlantic Richfield, the US oil company being taken over by BP Amoco, is to receive a pay-off of almost $28m, it was disclosed last night.

Listing particulars relating to the $27bn deal, sent to shareholders yesterday, show that a Arco's five most senior executives, led by chief executive and chairman Mike Bowlin, will earn severance pay totalling more than $60m.

Mr Bowlin has been with the company for 31 years and his $27.6m pay-off is made up of a range of severance pay and share-option entitlements.

Arco's chief operating officer, Michael Wiley, and its finance director, Marie Knowles, will each receive pay-offs just over $10m while two other executive vice presidents, Kenneth Thompson and Donald Voelte, will get packages worth $7.6m and $7.1m respectively.

The document sent to shareholders also shows that the total expenses of the takeover will be $155m, excluding VAT. BP Amoco will also be liable to pay $475m in stamp duty reserve tax because it is paying for Arco in shares.

BP Amoco exploited a tax loophole to avoid a similar liability on its $60bn acquisition of Amoco, since when the Inland Revenue has tightened the rules.

The biggest single fee earner from the Arco deal will be the US bank Morgan Stanley, which is acting as lead adviser in addition to sponsoring the issue of 1.7 billion new BP Amoco shares.

Monster pay-offs are a common feature in the US oil industry. When BP bought Amoco last year its chairman and chief executive, Larry Fuller, collected a severance package including share options worth more than pounds 50m.

Sir John Browne, BP Amoco's chief executive, said earlier this week that he expected to complete the Arco deal by the end of this year and anticipated no serious regulatory obstacles.