Investors in BP should not be surprised by the news that chief executive Bob Dudley is planning to slash the dividend if and when payments are resumed next year.
The American oil veteran was drafted in to the top job to aid the company’s public image following the disastrous Deepwater Horizon explosion on 20 April, as a steady hand following ex-chief executive Tony Hayward’s embarrasing string of gaffes.
Dudley has already taken bold steps to distance the firm from the spill, for example linking all bonus payments solely to safety records for the next quarter.
The numerous hints of a stripped down BP, even before Dudley’s final plan for the firm is revealed in February, seems to suggest that his scheme to overhaul the company goes beyond earning BP its hairshirt in the eyes of the public.
BP has boasted the largest dividend payment in the UK for several years, paying out around £6bn a year. It now also boasts the most expensive oil spill in the world, and a $20bn compensation pot waiting to be claimed. It is clear the company must emerge a smaller, more focused one.