Good morning. BP said former Chief Executive Bernard Looney will lose out on as much as $40.6 million in compensation as the result of his abrupt resignation over past relationships with colleagues.

• The details: The significant cost to Looney of his September departure from the London-based company includes the maximum potential value of salary, pension payments, deferred bonuses and other compensation he might have received, before taxes, BP said in a release on Wednesday. The amount is based on assumptions about share price and would have fluctuated based on performance.
   
• Losing out on bonus payments: The estimate includes unvested share awards and a chunk of bonus payments that BP’s board decided Looney should pay back because of what the company on Wednesday called “misleading assurances” about Looney’s past relationships.
   
• Why? BP said Wednesday it determined that information Looney provided going back to July 2022 was “inaccurate and incomplete.”
   
• Growing use of clawbacks: Clawing back executive pay has become more common in recent years, and most companies have policies to recoup compensation in certain circumstances. McDonald’s CEO Steve Easterbrook agreed to return more than $100 million to the company to resolve a dispute related to his ousting.

SEC cyber rules loom over public companies.

Security chiefs and corporate lawyers are wrestling with how much information to report about cyberattacks under new disclosure rules, worried that saying too much might invite lawsuits and more hacks.

Starting Friday, the Securities and Exchange Commission will oblige companies to disclose how they manage cyber risk in annual reports, known as 10-Ks. Companies will be expected to detail how they assess threats and protections, and to what degree their boards exercise oversight on cyber issues. Annual filings must also describe the potential material effects of a successful attack.

The conflict. Companies have complained about the four-day reporting window and the difficulty of determining what constitutes materiality, but some security chiefs say that larger companies should already be doing most of what is required in the rules, at least for annual reporting.

U.S. Treasury appoints leaders in sanctions, anti-money laundering units.

The U.S. Treasury Department named two new deputies to help lead its sanctions enforcement and anti-money-laundering units, the agency said Wednesday.

The changes in the two Treasury units come as their mandates gain additional significance amid geopolitical events, including Russia’s invasion in Ukraine and the Oct. 7 attack by Hamas on Israel.

• Credit Suisse Securities and two affiliated entities will pay more than $10 million to settle charges from the U.S. Securities and Exchange Commission that it allegedly provided certain prohibited services.
   
• The Securities and Exchange Commission adopted rules aimed at pushing more Treasury trading into central clearinghouses.
   
• The climate deal at the COP28 conference in Dubai amounts to a promise to revolutionize the global energy system.
   
• Credit Agricole said it won’t finance any new fossil-fuel extraction projects and that it aims to be carbon neutral by 2050, a day after governments at the United Nations COP28 climate conference agreed for the first time to transition away from coal, oil and natural gas.
   
• Adobe said it could face significant costs or penalties tied to a Federal Trade Commission probe into its disclosure and subscription cancellation practices.
   
• Hunter Biden called the Republicans’ investigation of his family illegitimate as he defied a congressional demand to testify Wednesday behind closed doors.

Fed holds rates steady and sees cuts next year.

The Federal Reserve held interest rates steady and signaled inflation had improved more rapidly than anticipated, opening the door to rate cuts next year.

Most officials penciled in three interest rate cuts for 2024 in projections released after their two-day meeting on Wednesday.

Officials have hesitated to declare mission accomplished and were careful not to rule out higher rates in their policy statement, which was little changed from recent versions that have said tighter policy remains possible.

Houthi rebel attacks rattle global shipping.

Yemen’s Houthi forces have attacked several commercial ships crossing through the Bab el-Mandeb strait in recent days, creating a new front in the battle between Israel and Hamas and complicating efforts by the U.S. and its allies to secure the critical shipping lane.

Houthi rebels claimed responsibility on Tuesday for a strike on the Norwegian tanker Strinda a day earlier off Yemen’s coast, as the Iranian ally escalates attacks to disrupt the flow of cargoes in response to fighting in Gaza. The elevated risk of moving cargoes through the region has resulted in higher costs for shippers and also prompted some countries to rethink security measures to allow safe passage.

• Pfizer shares tumbled to their lowest close in more than nine years, after the giant drugmaker overestimated Covid-19 vaccine use and the company was forced to warn about its prospects.
   
• The Covid-19 pandemic may be largely in the rearview mirror, but there is at least one area of the economy that remains ill: the office sector of the U.S. commercial real-estate market.
   
• A plan to prevent another developing-country debt crisis is now at the root of the latest financial troubles destabilizing economies from Ghana to Sri Lanka and Pakistan.
   
• The Organization of the Petroleum Exporting Countries left its expectations for global oil demand unchanged for this year and next and raised its 2023 global economic growth forecast, against a backdrop of falling oil prices the cartel has been unable to halt.
   
• The International Energy Agency expects global oil-demand growth to weaken next year, reflecting the slowdown in major economies in the wake of higher interest rates.
   
• Residents of Ukraine’s capital were weathering missile strikes and a cyberattack on a mobile-network operator that authorities called Russian efforts to sow chaos and sap national morale.
   
• The Biden administration is holding back a shipment of more than 27,000 U.S.-made rifles intended for Israel’s national police over concerns they could end up transferred to extremist Israeli settlers in the West Bank, U.S. officials said.
   
• Israeli Prime Minister Benjamin Netanyahu is betting his political survival on opposing a Palestinian Authority role in postwar Gaza and blocking the emergence of any Palestinian state, a move that has put him directly at odds with President Biden, his most important ally in Israel’s war against Hamas.
   
• Online publishers expect to lose between 20% and 40% of their Google-generated traffic once the tech giant has finished rolling out its new, generative-AI-powered search tool that answers questions without linking out, the biggest change to its core product in its history.

• The Dow Jones Industrial Average became the first major U.S. stock index to set a record since the Federal Reserve started raising interest rates.
   
• The House narrowly approved opening an impeachment probe into President Biden on Wednesday, hours after his son, Hunter Biden, defied a congressional demand to testify on Capitol Hill, marking a sharp escalation in the battle between the White House and Republicans.
   
• Prestigious universities are learning the costs of the big gifts they receive from prominent donors.
   
• The economic news is getting better—but President Biden’s approval ratings are sinking, and large swaths of the electorate are pessimistic about the future. What’s going on? And how will these trends play out next November?
   
• Russian President Vladimir Putin vowed to press on with his war on Ukraine during an end-of-year audience in which he said his country’s goals in the conflict hadn’t changed and that peace wouldn’t come until they are achieved.
   
• Russian authorities have opened a new criminal case against a Russian-U.S. journalist for Radio Free Europe/Radio Liberty on an allegation that she spread false information about Russia’s military, according to the Russian state news agency TASS.

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