LONDON - BP said Wednesday it has settled an Alaska court case launched by U.S. shareholders by agreeing to allow tighter oversight by its largest investors and to pay $9.75 million of the plaintiffs' lawyers fees and costs.
In addition, the British oil company has agreed that ex-Chief Executive John Browne will permanently waive rights to certain termination benefits, which had been frozen last year.
The information was released in legal documents provided Wednesday by BP and confirmed by the plaintiffs' lead counsel, Coughlin Stoia Geller Rudman & Robbins.
Two BP shareholders, the London Pensions Fund Authority and the pension fund of U.S. labor union Unite Here, in October 2006 sued the company and its executives, alleging their mismanagement had led to a series of U.S. mishaps.
Those included a Texas City, Texas, refinery blast that killed 15 workers in 2005, a partial shutdown of an Alaska pipeline in 2006 and a federal investigation into alleged propane price manipulation.
The case didn't seek financial compensation for the shareholders - as it would have indirectly hurt them - but changes in the company's corporate governance rules.
Under the settlement, BP has agreed to "enhance its dialogue with stockholders on corporate governance issues by holding at least one meeting each year with a number of the top 20 stockholders, hosted by the BP chairman," one of the documents says.
BP will then endeavor "canvassing the views" of the top shareholders, it adds.
In addition, the settlement stipulates a program of visits at operating sites for nonexecutive board directors so as to improve their understanding of the company's strategy.
In addition, the document shows BP has set up a Group Financial Risks Committee chaired by the company's chief financial officer, whose primary focus will be the group's trading activities. This decision was taken before the settlement.
The document also mentions a Group Operations Risk Committee chaired by BP's Chief Executive Tony Hayward to keep tabs on operational risks and the strengthening of its Americas unit's oversight ability.
In the United States, BP has created new vice-president positions for safety operations and compliance and ethics, and an external advisory board.
Patrick Daniels, a lawyer with Coughlin Stoia Geller Rudman & Robbins, said the measures would give "more autonomy and more power" to the U.S. unit from London, adding that the subsidiary's inability to make its own decisions had increased the operational risks.
BP spokesman Robert Wine couldn't immediately say how much Browne, who left the company in May 2007, had forfeited.
Wine said the company set specific safety criteria for the award of bonuses to executives for 2007.