Two large BP PLC stockholders asked an Alaska court on Friday to freeze millions in retirement benefits for outgoing chief executive John Browne, saying he does not deserve compensation in light of recent crises at the oil giant’s facilities in Texas and Alaska.
At stake is at least $140 million in cash bonuses as well as stock, stock options, long-term performance pay and pension benefits, according to documents obtained by The Associated Press.
The motion, filed in Alaska’s Superior Court, asks that Browne’s retirement package be placed in a court-approved trust while shareholders litigate with BP over alleged violations of worker safety and environmental protection laws.
The lawsuit was brought by the London Pensions Fund Authority, which owns 3.2 million shares of BP stock, and the U.S.-based Unite Here National Retirement Fund, a clothing, hotel and restaurant union that owns 6,000 shares.
The two pension funds said BP’s assets have suffered from the partial shutdown of the massive Prudhoe Bay field in Alaska following a pair of spills last year, and a refinery explosion in Texas City, Texas, that killed 15 people and injured more than 100 others in 2005.
London-based BP reported this week that its fourth-quarter profit had dropped 22 percent to a two-year low following the high-profile mishaps. The company has slashed its growth targets and raised its capital expenditure forecast for this year. BP said adjusted net profit dropped to $2.88 billion from $3.69 billion a year ago.
BP spokesman Daren Beaudo said the company doesn’t comment on pending legal matters.
Collecting damages over BP’s management practices and weakened assets would be much easier for shareholders if Browne’s access to the hefty retirement package is blocked, attorneys said.
“The notion is that by his conduct, he hurt the corporation and since the board won’t sue him, the stockholders are allowed to step up and say, ’I will sue for the corporation,”’ said William S. Lerach, a San Diego-based attorney for the plaintiffs.
In January the company announced Browne would leave the CEO position by the end of July, a year ahead of schedule.
The motion on Friday sought to temporarily stash Browne’s departure package in short-term U.K. Treasury Gilts (bonds) or other liquid assets approved by the court. The package includes $40 million in pension benefits, $54.5 million in long-term performance pay, $30.7 million in stock options and $18.3 million in previously awarded cash bonuses, according to court documents.
Lawyers said a ruling on the motion could take two months.
Browne first joined the company in 1966 as an apprentice. During his tenure as CEO, BP said, the company saw a fivefold increase in its market capitalization to $202.7 billion.