BP will make $10 billion in profit payouts despite spill

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

By John Byrne
Friday, June 4th, 2010 -- 9:28 am
43diggsdigg

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

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.

Story continues below...





“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.

ADVERTISEMENT



Views: 14

Reply to This

"Destroying the New World Order"

TOP CONTENT THIS WEEK

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

Latest Activity

Less Prone left a comment for Roberto Castorena
"Welcome to a revolutionary concept in public communication, the truth."
yesterday
Less Prone posted a blog post

Reiner Füllmich imprisoned for investigating the Covid scandal

Rainer Füllmich, a lawyer investigating the Covid scandal was illegally captured in Mexico in…See More
yesterday
Burbia posted a video
yesterday
Doc Vega posted blog posts
Wednesday
Less Prone favorited Doc Vega's photo
Tuesday
tjdavis posted a video

They Destroyed Our Country and Nobody Stopped Them | No Commentary

Music Used in this Video:Song/Music - TimeArtist - Hans ZimmerLicense Type: Creative CommonSong/Music - Evidently ChickentownArtist - John Cooper ClarkeLicen...
Tuesday
Doc Vega posted blog posts
Monday
Doc Vega posted photos
Monday
Sandy posted a photo
Jan 11
james will's blog post was featured

What Is Tubidy? A Complete Beginner’s Guide

IntroductionTubidy is a free online platform that allows users to search, stream, and download…See More
Jan 10
Less Prone favorited james will's blog post What Is Tubidy? A Complete Beginner’s Guide
Jan 10
Roberto Castorena is now a member of 12160 Social Network
Jan 9
Less Prone favorited tjdavis's photo
Jan 9
Doc Vega posted a blog post

What They Told Us About Health and Now it’s Completely Reversed?

 Remember growing up that they told us all of these rules of thumb when it came to your…See More
Jan 8
tjdavis posted a photo
Jan 7
Less Prone commented on Doc Vega's photo
Thumbnail

G99Gt39XEAAyu6Y

"Judges with bad judgement should be working somewhere else. When political affiliation surpasses…"
Jan 7
Doc Vega commented on Doc Vega's blog post GROK Acknowledges the Co-existence of Humans and Dinosaurs
"Less Prone, this Carlos guy has a unique artistic approach but it's not proof. There's…"
Jan 7
Doc Vega posted photos
Jan 6
Doc Vega posted blog posts
Jan 6
tjdavis posted a photo
Jan 4

© 2026   Created by truth.   Powered by

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2019 - all rights reserved. unless otherwise noted