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Should BP Stop Paying Dividends?

Simulated oil splatter on a BP gas station sign in Manhattan, New York.
Photo: Johan Lammers
Simulated oil splatter on a BP gas station sign in Manhattan, New York.

With the high costs of the BP's Gulf of Mexico oil spill and no end in sight, some government leaders are questioning whether BP should continue to pay dividends to its shareholders. The company has said that no decision will be made until July when the next payment is scheduled, however, we decided to ask the Kudlow Caucus today:

As the drilling disaster spreads, should BP stop paying dividends?

Take our poll below and tell us what you think! Watch "The Kudlow Report" tonight at 7pm ET and find out what out caucus members have to say or check back here later for a summary from our caucus members.



The Kudlow Caucus Breakdown

Yes
Jerry BowyerChief Economist, Benchmark Financial Network
This company is on a path towards possible bankruptcy. Dividend payments would be tantamount to gaming the bankruptcy system. They have no idea what their liabilities will be, so how in the world could they possible know how much profit they can afford to distribute until the cost of the disaster has been quantified and confirmed? Maybe senior execs should take a pay suspension for a while too.

No
Andrew B. BuschGlobal Currency and Public Policy Strategist
BMO Capital Markets
They should continue to operate as usual until they stop the gusher and until they know the extent of the damages. However, they should warn that a dividend cut may be coming.

No
Kellyanne ConwayCEO and President
the polling company™
BP's Chairman says they are financially strong. The first dollars - and ample resources - should go toward the Gulf situation. BP has other commitments, including to its employees and citizen-shareholders, many of whom rely on dividends for their own livelihood and retirements.

Yes
David P. GoldmanSenior Editor
First Things
It should reserve funds against unforeseen costs.

Yes
David GoodfriendLawyer
BP should divert all available free cash flow to stopping the spill and cleaning it up. It's pay now or pay later, and the former is more honest to shareholders.

Yes
Jim LaCampPortfolio Manager, Portfolio Focus, RBC Wealth Management
Co-Host, Opening Bell Radio Show, Biz Radio Network
It would at least send a message that their resources are prioritized to the cleanup.

No
Donald L. LuskinChief Investment Officer, Trend Macrolytics LLC
BP’s strong cash and earnings position enable it to deal with clean up costs and penalties easily. They should still pay the dividend.

Yes
Steve MooreSr. Economics Writer, The Wall Street Journal Editorial Board
It would make sense for them to hoard cash in order to pay the fines and make restitution for the people who have been harmed this environmental disaster.

Yes
Peter Navarro
Business Professor
University of California, Irvine
They are going to need the cash to pay for the spill – or the lawyers.

Yes
James Pethokoukis
Money & Politics Columnist
Reuters
Given the incalculable and unpredictable damage from the spill, keeping as much cash on hand would be wise.

Yes
Robert Reich
Former Labor Secretary
Professor of Public Policy, UC Berkeley
The costs of stopping the gusher and cleaning up after it could run tens of billions of dollars. If BP moves to pay out dividends the government should put it under temporary receivership, as it would any likely defendant who's distributing its assets.

Yes
Mark Walsh
Political Strategist and Campaign Innovator
Shareholders should understand the potential catastrophic cost of their company’s actions. Dividend payments should be held in escrow while the costs and legal liabilities are estimated.

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