Doubts over BP role as chairman lands Volvo job
Tuesday 13 December 2011
Carl-Henric Svanberg's days as BP chairman could be numbered,analysts warned, after the Swedish businessman agreed to add to his busy assortment of appointments the same job at Volvo.
Mr Svanberg, below, who infamously referred to those affected by the Macondo blowout in the Gulf of Mexico as "small people", is committed to spending three days a week working for BP as part of his £750,000-a-year contract, freeing him to work elsewhere for the rest of his time.
But given how much pressure BP is likely to come under in the next two years as the company restructures in the wake of the spill, analysts and investors question whether it is appropriate for him to take the Volvo job.
Sam Wahab, an oil analyst at Seymour Pierce, said: "This is a controversial decision. It is possible to do several non-executive jobs as has been done many times.
"The difference here is that BP is underperforming in terms of its share price, its market position and in establishing a proper internal strategy. We might see Mr Svanberg slowly drift away once BP can find somebody who can really steady the ship."
Malcolm Graham-Wood, an analyst at VSA Capital, said: "There is going to be a massive amount to do over the next year or two. Given the amount they're paying Mr Svanberg I would think that investors would rather have him on tap, rather than thinking about something else, like Volvo."
BP is facing a huge court case in America over the oil spill and a potential lawsuit from TNK-BP over a failed tie-up to explore the Russian Arctic with Rosneft. It is also selling $38 bn (£24 bn) of assets and, many believe, desperately needs to draw up a clear strategy.
"It is quite possible that at some point over the next three or four months it will be deemed that Mr Svanberg is unable to do both jobs at the same time. If I were a shareholder, I'd like him to just do BP or go," Mr Graham-Wood added.
BP insisted yesterday that it "fully supported" Mr Svanberg's taking the Volvo role in addition to his responsibilities at the oil major.
The ice hockey-playing businessman has been criticised for keeping a low profile during the Gulf of Mexico oil spill, excepting his "small people" remark for which he later apologised.
Instead, then-chief executive Tony Hayward took most of the flak, prompting his resignation from the company last year. He is now running Genel Energy, an oil firm focused on the Kurdistan region in northern Iraq.
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