Should CEO’s be punished for making mistakes by being fired or fined?
Tony Hayward, Chief Executive Officer, of British Petroleum(BP) was awarded a bonus this year for having met cost cutting and safety targets that were set by the UK petroleum company. His salary with the bonuses totaled around $5.92 million according to Dailyfinance.com. The questions that might be raised by the cost cutting are did it result in the accident of the Deep Water Horizon platform?
DeAnne Julius, former member of the Monetary Policy Committee said that the petroleum company would raise the issue of how meeting targets for bonuses would be awarded at the next shareholder meeting in April 2011. Prior to the oils spill in the Gulf of Mexico BP was beating all the previous targets it had set down. One of the targets it beat was for oil production .
BP was producing more than one of it major competitors Exxon/Mobil(XOM). All this despite the horrible market for oil last year. If Mr. Hayward should be punished for BP’s problems in the Gulf, should his boss Carl-Henric Svanberg also be punished? Should all CEO’s be punished for problems by salary reduction or by sacking? This may be just an issue for shareholders to decide, by dumping their shares or calling for his replacement.
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