Company must accept the costs
Attempting to attach a dollar value to anything and everything is often a bad idea, as jury awards for “emotional suffering” and the like have shown time and time again. But sometimes, dollars are the right measurement and the right tool. That’s the case with the British Petroleum oil spill, which had its genesis in a highly profitable company’s error, and the result of which has been economic damage to many Americans who make their living in the Gulf of Mexico.
Much has been said about whether BP should suspend dividends to its stock-holders in order to compensate those who the spill has hurt and to pay for clean-up efforts. The bottom line is that BP should pay compensation and clean-up costs, and whether those payments come from dividends, executive bonuses or operating cash flow is immaterial. BP is responsible and BP should pay. It certainly has the ability to do so.
Some have argued that shareholders should not bear the brunt of those costs. That viewpoint is nonsense. Whether it is lost dividends, reduced stock price or some other cost, those who hold BP stock were betting on the company’s success — or lack of it. Their bet is not currently paying off very well, and so be it.
There is much that can be argued about the true costs of the spill, about how much the clean-up will cost and how much compensation individuals and small businesses need. What there shouldn’t be an argument about is whether BP should pay. There’s simply no questino about it: The company — and its shareholders — should accept responsibility