BP Chair Helge Lund intends to step down “likely during 2026” and the process to pick his successor has started, the energy group said today amid a campaign by activist hedge fund Elliott for more change at the company.
Lund had backed BP’s 2020 strategy under former CEO Bernard Looney to move away from oil and gas, including an ambition to cut its hydrocarbon output by 40% this decade.
BP’s shares have been underperforming rivals such as Shell and Exxon. BP’s market capitalisation of around $84 billion is currently less than half of Shell’s.
Following gradual steps away from that strategy – and Looney’s departure in 2023 after it emerged he had not disclosed relationships with colleagues – new chief Murray Auchincloss in February announced a renewed focus on oil and gas.
Elliott Management, which has built a near 5% stake in BP according to sources, wants even more change, including a more ambitious asset disposal programme compared with the group’s $20 billion divestment target up to 2027.
“The decision to step down should be well received and reinforce BP’s intention to undergo a structural strategic change. It also likely shows the first real impact of Elliott’s involvement,” said Giacomo Romeo, equity analyst with Jefferies.
Lund stands for re-election at BP’s April 17 annual shareholder meeting. Elliott has met with other shareholders to discuss issues including potential leadership changes, sources have told Reuters.
Elliott Management declined to comment today.
Some climate-focused investors have called for Lund’s exit for not allowing shareholders a vote on BP’s renewed focus on oil and gas.
“Now is the right time to start the process to find my successor and enable an orderly and seamless handover,” Lund said in a statement.
Lund received fees and benefits for his role at BP of £882,000 for last year and holds stock that was worth £2.8m as of February, according to BP’s annual report.
The successful candidate will join the board and work with Lund ahead of taking on the role, at which point Lund will step down from the board, most likely in 2026, BP said.
Norwegian national, Lund, 62, was named chair of the BP board in January 2019.
Before that, he was the CEO of BG Group when Shell bought it, following a 10-year stint as CEO of Norway’s Equinor, formerly Statoil.
He has also been the chair of Danish drugmaker Novo Nordisk since 2018.
