(Reuters) -BP Chair Helge Lund intends to step down “likely during 2026”, the energy group said on Friday 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, with BP’s market capitalisation of around $84 billion 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.
“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.
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 through 2027.
BP’s shares were down 1.7% in early trading compared with a 2% fall for a wider index of energy companies.
Elliott has met with other shareholders to discuss issues including potential leadership changes, sources have told Reuters. Elliott Management declined to comment on Friday.
“To several investors we have spoken to, Helge was seen as the chief architect of the prior (2020) strategy, while he also appointed the previous CEO, which ultimately led to material share price underperformance over many years,” said RBC analyst Biraj Borkhataria.
“Stepping down voluntarily is probably a better look than the alternative.”
Some climate-focused investors have called a vote against Lund’s re-election at the April 17 AGM for not allowing shareholders a say on BP’s renewed focus on oil and gas.
“The need to vote against the chair in 2025 has not disappeared with his resignation in 2026,” said Mark van Baal, founder of the Follow This climate shareholder group, whose resolution received support from 17% of BP shareholders in 2023.
“Investors concerned with good governance must voice their concerns.”
Lund received fees and benefits for his role at BP of 882,000 pounds ($1.15 million) for last year and holds stock that was worth 2.8 million pounds 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.
(Reporting by Shadia Nasralla in London and Chandini Monnappa in Bengaluru; Editing by Janane Venkatraman, Rashmi Aich, Jan Harvey and Tomasz Janowski)
By Shadia Nasralla
