quote from bp ceo tony hayward may 31, 2010 “we're sorry for the massive disruption it's...

Economic Recovery

Quote from BP CEO Tony Hayward May 31, 2010

“We're sorry for the massive disruption it's caused their lives. There's no one who wants this over more than I do. I would like my life back."

Agenda

• Tony Hayward• Kenneth Fienberg • Claims Process• People Affected

Tony Hayward Compensation

• Former CEO of BP• Stepped down as CEO on October 11, 2010• According the Telegraph, Tony Hayward got

£2m in salary and severance payments, plus a £600,000-a-year pension.

Kenneth Feinberg

• In charge of distributing the $20 billion dollars of BP, head of the Gulf Coast Claims Facility

• Administrator of the 9/11 Victim Compensation Fund

• “Neutral Player”• Paid 10 million a year for his work • BP complaining Finberg's settlements are to

generous.

The BP Game

Last Day

Recap of the BP Game • There are problems with the claims process

– There is theft and unethical people trying to make money off of other peoples misfortunes

– The wealthy are usually paid first– BP is constantly whispering in Feinberg ‘s ear

• According to the Associated Press, 490,000 claims have been filed and more than 50% have been turned down

• According to the Gulf Coast Claims Facility, “less than 20% of claimants have submitted complete 2010 supporting documentation”

• Quick payments– $5,000 per individual – $25,000 for business.

People Affected

• Fishermen - Fishing has been ban in 40% of the water in the gulf after the spill.

• People are out of a jobs– According to a fisherman in the New York times article, BP Says Spill

Settlement Terms Are Too Generous . “We need help now! We have not been paid in 8 months. I have a mortgage, car payment, utilities, and a child. I’m close to losing my home and I pray that you figure out everything before I lose everything. We are people with real lives! This has been a horror for my family.”

• Tourism Industry hit hard

Other Problems

• First permit to drill again in the gulf was approved.

• Mary Landrieu a Democratic Senator from Louisiana said “ hope that this permit is the first of many to come, and I will continue to use every lever at my disposal to ensure that it.”

Conclusion

• Money and greed drive big organizations • At the end of the day, main street is the one

who looses• The path to recovery is going to be long and

hard.

Questions

What did we learn form this

• Distributing money is hard. • There are many people that are over paid• Having access to a lawyers and other people that

advocate on your behalf helps • Showed that claims process is very convoluted• There is incentives in holding on to money.• Oil companies can persuade politicians.• Financial recovery is going to be more than 2

years.

Reference• http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8358

531/BP-directors-take-bonuses-for-year-of-Gulf-of-Mexico-oil-spill.html

• http://www.nytimes.com/2011/02/18/us/18bp.html?partner=rss&emc=rss • http://www.nola.com/news/gulf-oil-spill/index.ssf/2011/02/gulf_oil_spill_cl

aims_process.html

• http://www.wdsu.com/r/26863948/detail.html • http://www.boston.com/news/science/articles/2010/08/15/fishermen_tak

e_shots_at_bp_skimming_program/

• http://travel-industry.uptake.com/blog/2011/01/24/louisiana-bp-oilspill-tourism-losses/

• http://thinkprogress.org/2011/02/26/ken-feinberg/• http://i2.cdn.turner.com/money/2010/07/16/smallbusiness/florida_bp_clai

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