WEDNESDAY JUNE 16, 2010

BP cuts the dividend

After a meeting at the White House, BP has agreed to cut its dividend for the remainder of this year and to set aside $20 billion in a spill compensation fund that it does not control.  Given the heightened political rhetoric, it is not surprising that BP succumbed to the political pressure.  Its inability to control the oil flow, combined with inferences of "short-cuts", left the company with little bargaining power.  Interestingly, BP's shares gained after the announcement.  The market seems to be concluding that it could have been worse.  For a while, it appeared that Washington was trying to bankrupt BP.  I doubt that would have been good for the recovery process in the Gulf.  So, at least for the moment, the political rhetoric may settle down and we can focus on capping the well.

POSTED AT 1899-12-30 15:18:00.0

KEN ENTENMANN, CFA
SENIOR VICE PRESIDENT AND
THE DIRECTOR OF INVESTMENT MANAGEMENT SERVICES

Ken is a Senior Vice President and the Director of the Trust and Investment Services at Alliance Bank, N.A. He has 23 years of investment experience and oversees the management of assets totaling $1 billion. He holds a B.S. in Applied Economics and Business Management from Cornell University and an M.B.A. from the William E. Simon Graduate School of Business Administration at the University of Rochester. He has also earned his Chartered Financial Analyst designation. He is a member of the Executive Committee of the Trust Division of the New York Banker's Association. He is also a director of the Central New York Community Foundation.

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