Arco sell-off lands boss pounds 20m

Fortunes earned by US executives as BP buys oil rival

MIKE R BOWLIN, the chairman of the American oil company, Arco, will receive $33m (pounds 20m) for selling his company to the British giant, BP Amoco. Share options owned by Mr Bowlin and other Arco directors and senior employees, worth some $200m, will crystallise on completion of the $26bn deal.

According to company documents, Mr Bowlin's personal package includes a $4.2m cash payment based on salary and bonus plan and stock options worth some $29m.

Once the takeover is completed, the entire Arco board will resign. The other Arco directors will also be beneficiaries of the $200m distributed under the company's stock option scheme.

BP's $48bn merger with Amoco last year has also made the Chicago-based company's directors considerably more wealthy. Bill Lowrie, who resigned as deputy chief executive of BP Amoco in February, received $6m in severance payments and holds share options currently worth pounds 17m.

Laurance Fuller, who was due to retire shortly but will now see the Arco deal through regulatory hurdles, has stock options from the same Arco scheme worth pounds 36m.

And, of course, senior staff at the British company have been rewarded for recent performance. Last year, Sir John Browne, BP Amoco chairman, earned pounds 1.5m and received shares under a performance scheme worth $1.1m.

Mr Bowlin said on Thursday that he negotiated with Mr Browne without thinking what he might receive. He did not press for a new job.

"They didn't need another vice-chairman," he remarked last week. "We weren't under any illusions about who was to be acquired here."

He praised the terms of the deal with BP Amoco, which foresees generous severance packages for employees.

He said: "I'm very pleased we have been able to be very generous with our employees. I think that shows a sensitivity on the part of BP Amoco."

Mr Bowlin also pointed to an unusual provision in his company's articles. This foresees payments for employees in the event of a takeover. Top executives will receive three times their annual salary and normal employees will get six months' pay should they lose their jobs.

Asked about Mr Bowlin's personal role in integrating Arco into BP Amoco, Rodney Chase, BP Amoco deputy chairman, made a zero with forefinger and thumb.

Asked about his plans, Mr Bowlin said he did not intend to retire at the age of 56, but would fulfil a personal ambition by buying a ranch in Texas.

Mr Bowlin, who started out in human resources at Arco in 1969 and became chairman in 1995, contacted Mr Browne in January about a possible sale.

The two men have met several times during the past few months in London, New York and Beverly Hills to help conclude the deal. A 12-strong team lead by Byron Grote was charged with thrashing out the legal, tax and financial details.

During these talks, codes were used to hide the highly price-sensitive deal. Arco was known as "acorn" and BP Amoco as "oak", then they became "wheat" and "maize".