BP to Delay Dividend to Appease Obama

Money will be put in escrow until full cost of Gulf cleanup is clear
By Kevin Spak,  Newser Staff
Posted Jun 11, 2010 11:50 AM CDT
BP CEO Tony Hayward, standing in the BP command center, updates reporters on efforts to clean up the catastrophic oil spill off the Louisiana coast Thursday, June 3, 2010, in Houston.   (AP Photo/POOL, Pat Sullivan)
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(Newser) – BP plans to defer its dividend in an effort to get the Obama administration off of its back, sources tell the Times of London. The money, which is expected to total about $2.5 billion, will be placed in an escrow account until the full cost of the Gulf disaster is determined. The US wants the payment suspended or cut, but the company, which hasn’t cut its dividend in 18 years, is looking for a compromise.

In an interview with the Wall Street Journal, Tony Hayward said the company was “considering all options on the dividend. But no decision has been made.” Another possibility is paying the dividend in scrip—essentially, an IOU. The final plan will need to be approved by BP’s board, which increasingly realizes that they need to calm the political storm, according to the Times source.

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