Enough's Enough, Nabors Shareholders Say - $100 Million termination payment to CEO

Enough's Enough, Nabors Shareholders Say


HOUSTON (CN) - Shareholders say oil-drilling giant Nabors Industries' executive compensation practices are out of control: its board recently approved a $100 million "constructive termination" payment to its ex-CEO, an amount that "exceeds the company's third quarter 2011 profits by over $25 million."

Nabors was founded in 1968 as Anglo Energy. The Bermuda-based oil and gas driller, which operates out of Houston, reported $3.5 billion in revenue in fiscal year 2009.

In the federal class action, named plaintiff Erie County Employees Retirement System says Nabors' board of directors "have wrongfully caused and allowed the company to grant excessive and improper compensation to Nabors' executive officers, particularly its chairman and former chief executive officer, defendant Eugene M. Isenberg."
...

"The continued grants of excessive compensation are underscored by the company's October 28, 2011 announcement that its board of directors (the 'Board') had appointed a new CEO, and in connection therewith, Nabors would be making a 'constructive termination' payment to defendant Isenberg in the amount of $100 million, plus additional compensation, despite the fact that he is to remain with the company as chairman. Put in perspective, the payment to defendant Isenberg exceeds the company's third quarter 2011 profits by over $25 million," the complaint states.

http://www.courthousenews.com/2011/11/21/41607.htm

And institutions like public pensions own a pretty significant part of corporations.

If they all got together, they could change these things.

$100 million to one person for a golden parachute is $100 million that could have been reinvested in the company, providing jobs to the community and innovation that could potentially help the industry they are in.

That's the problem with these ridiculous compensation schemes.

are incapable of seeing the whole picture.....

Maybe if you gave them a huge tax break but other than that it's all driven by revenues.

So that the company can grow, innovate and provide jobs. Instead, they hand it all over to one person who is getting fired and will never be part of the company. That's insanity, and a huge part of the problem.

When a company grows and innovates, the community benefits because people have jobs.

EDIT: Not to mention the company stays healthy. Throwing away $100 million on a person that is getting canned makes no sense whatsoever. If you are getting canned, it's because you sucked in the position. Why reward that?

I'm just skeptical that what doesn't get paid out gets invested. I don't see that as the trade off in decision making, i.e. "should we fire the CEO or should we grow the company".

That makes no sense to me. Obviously it made no sense to the shareholders, either. Kick him to the curb, and pay out dividends to the shareholders - anything, but handing out $100 million to some loser you are firing. There are MANY different things they could do with $100 million, including donating to charity for a tax write-off, that would be better than a golden parachute of that size.

EDIT: And let me just say this - I don't believe for an INSTANT that this guy would walk away with $100 million. I think this is an excuse for them to cut a deal with him, and it allows the others an opportunity to steal a chunk of that change for themselves. You know that goes on when they cut these little backroom deals that requires everyone to sign a non-disclosure agreement about the terms.

Instead of prosecuting the fraud in the banking and financial sector, the Feds at one point prosecuted the leading lawyers who brought class action suits on behalf of shareholders.

I don't know enough about the claims brought against the lawyers to know whether they were justified or not. But the prosecutions appear to have left the financial sector without effective watchdogs. It's good to see someone is starting to act on behalf of shareholders again.

on these outrageous bonuses. Maybe this will wake up others and we can have an OWS on CEO compensation. About time.

boards and ceos

ceos sit on other boards
ceos sit on their board
one big happy family that screws everyone except themselves