BP shareholders split over chief's retirement age

Leading shareholders in BP were yesterday split over whether Lord Browne should stay on as chief executive of the oil group after his 60th birthday.

Some said they would back Lord Browne, 58, if he wished to stay at the helm of the company he has headed since 1995.

The Co-operative Insurance Society said BP's rule that executives should retire at 60 was "unjustifiable and should go". Others agreed. "It's not a good thing that people should retire at 60. We're happy to see some flexibility," said one major shareholder.

"It would be a positive if Lord Browne continued," a top-10 shareholder added.

David Cumming, head of UK equities at Standard Life, said investors would accept a finite extension to Lord Browne's tenure if his successor was not in place.

But other investors were concerned that extending Lord Browne's tenure would damage the succession process. Some said he should make a clean break from BP when he turned 60.

Another shareholder said: "While I don't think shareholders would object [to Lord Brown staying on], companies have retirement dates for a reason. There is always the danger of a chief executive staying on and not allowing their successor to find their feet."

Another said Lord Browne's proposed retirement at 60 had been well-flagged, so a late change of tack risked causing disruption among BP's senior management. "It should be full steam ahead [with the current plan]," he said.

Meanwhile, several investors were unnerved at the prospect of Lord Browne moving to a non-executive or advisory role within BP.

"It would smack of cowardice and suggest that BP does not believe its second-tier of management is good enough. It would send completely the wrong message to them," said a big shareholder.

However, other investors, including Morley Fund Management, said it was up to the board to decide on Lord Browne's retirement date.