British energy giant BP plans to suspend its second-quarter dividend as it faces growing public anger over its handling of massive oil spill in the U.S. Gulf Coast, according to published reports.
According to the BBC, BP directors will meet Monday to make a formal decision. The announcement is expected to be made after negotiating with President Barack Obama on Wednesday.
According to an earlier report from the Times of London, BP is preparing to defer payment of its next dividend to shareholders by placing the money in an escrow account until the full scale of the company’s liabilities from the Gulf disaster can be determined. Further quarterly payments could be treated in the same way.
"We are considering all options on the dividend. But no decision has been made," BP CEO Tony Hayward told the Wall Street Journal in an interview.
The move would affect the company's second-quarter dividend, which is scheduled to be announced July 27.
Presumably there would be no impact on the company's first-quarter dividend of $2.63 billion, which is payable June 21. That decision was announced April 27, just a week after the explosion that killed 11 rig workers and released a massive gusher into the Gulf of Mexico, the worst oil spill in U.S. history.
Some U.S. lawmakers and the Obama administration have pressured Hayward to halt the payment, creating friction with Britain, where widely held BP accounts for about an eighth of dividend payments in London's blue-chip index, providing crucial income for retirees.
House Speaker Nancy Pelosi on Thursday accused BP of a "lack of integrity" and urged the company to suspend its dividend to ensure victims of the oil spill are fully compensated.
BP, which generated $16.6 billion in profits last year, has not cut its dividend in 18 years.
While final approval for the dividend plan would need to be given by BP’s board next month, a growing number of BP directors now recognize that the move may be essential to placate US public opinion, the Times said.
Ooooh, dat mean Nancy Pelosi! Eighteen years without cutting a dividend payment, and now because of a few stinky, tarry beaches, dead fish, and oily pelicans, BP is going to have to stiff their shareholders.
My ass bleeds for them.