$100 million bonus to Nabors boss for stepping aside

For most of us, taking on a job with less responsibilities might mean a pay cut. For Eugene Isenberg, the outgoing CEO of Nabors Industries, it means a bonus. A really big bonus.

Isenberg will be given a $100 million cash payment as he drops the CEO title but remains chairman of the board.

As we noted earlier, the company said Chief Operating Officer Anthony Petrello will take the CEO post, a move that has long been expected because Petrello was considered the hand-picked successor to the 81-year-old Isenberg almost since the first day he was hired 20 years ago.

The drilling and oil field services company said in a filing with the SEC Friday night it will take a $100 million contingency liability in the fourth quarter related to the payment to Isenberg.

The filing makes reference to pay information on pages 29-31 of Nabors’ most recent proxy statement, where a table seems to indicate Isenberg also would realize another $10.1 million in stock options and $16 million in stock shares. Those values, however, are based on the difference between the company’s $23.46 closing stock price on December 31, 2010 and the exercise price of previously granted yet unvested options and shares.

Isenberg and Petrello have consistently ranked high on the Chronicle’s annual pay survey, with Isenberg taking the No. 1 spot three times since 2006.

But just to put the $100 million cash payment in perspective, that’s almost the same as the complete pay packages of the top 5 executives on the 2011 Chron 100 survey.

It’s also more than the $72 million in net income the company reported for the third quarter of this year.

Put as an hourly wage for a working stiff on a 9 to 5  job, that’s something like $48,000 per hour.

But as we noted back in 2007, Isenberg has been in line before for even larger payouts in the past for just leaving the company. Back then the company could have owed him up to $525 million just for walking away.

Apparently Isenberg doesn’t think $100 million is all that much. According to a transcript of a conference call this week with analysts, Isenberg discussed the impact of Nabors retiring 84 rigs and 60 trucks, plus another 13 rigs from Nabors International.

“The impact of all these is about $100 million of write-downs,” Isenberg said. “Which I suggest, again, we ignore.”

58 Comments

  1. Steven

    No wonder these guys are so resistent to new energy technologies…

    #1
  2. Paul

    $100 million could give every Nabors employee almost a $2.00 per hour raise.

    But I guess “first things first,” right?

    #2
  3. Hotpuppy

    Well… if $100 MM isn’t anything to you just let me know when I can pick mine up.

    #3
  4. jose

    I have placed my sell order.

    #4
  5. T

    This is a major flaw with the U.S. right now. We have an unemployment rate of 9.1% and lay-offs happening right and left and guys like this get $100 million dollars because they aren’t cutting the mustard at the position. What happened to firing the guy or a salary cut and demotion? Major company bail-outs and huge record profits on top of previous year’s record profits for oil companies. The list goes on. It’s going too far and I sense the rumblings of disgust coming to a head.

    #5
  6. B

    I WAS ABOUT TO ORGANIZE AN OCCUPY KATY BUT SUDDENLY EVERYBODY EVACUATED FROM THERE.

    #6
  7. drstock

    Sit-ins gave us Civil Rights Laws. Vietnam War protestors gave us an end to the madness. Let’s hope that OWS will give us adequate Wall Street regulations, laws, better corporate governance and an end to greed.

    #7
  8. michael c

    Amazing….greed at the highest form. Petrello tried to run a family off of their farm in NY. Mean people…..

    #8
  9. Occupy Wall Street ought to be at his door.

    #9
  10. B

    GREED IS A HUMAN, EMOTIONAL CONDITION, NOT A STREET CONDITION.

    #10
  11. There ought to be a LIMIT, somehow done, to stop THIS madness. Nobody, and I do mean nobody, is worth that kind of money. This is near the very top of a list of “What’s Wrong in USA” – !!

    #11
  12. There should be a limit, somehow done, to stop THIS madness !!
    High on a list of “What’s Wrong With the USA”. RIDICULAS.
    ABSOLUTELY RIDICULAS and we’re doing this every day. And Washington is sitting on their asses, BICKERING. What a disgusting mess.

    #12
  13. RobertH

    T, you’re exactly right. When did we decide that it’s acceptable to pay that kind of money out to one person. That’s more money than anyone deserves to have or could ever spend in their lifetime. Some people will defend it by saying that his talents made the company so much more than that. I say no, he helped… along with all of the other hard working employees in the company to make profits. I’m not against redistribution, I believe you’re responsible for yourself… successful or not. I’m very against large AMERICAN companies that take their business out of this country to use cheaper labor and materials for their own profits. When they do, they’re betraying their own country. The US has labor laws and environmental laws in place that drive our manufacturing costs up so why do we allow countries that don’t have the same standards as us to build and sell us their products? Hello?

    #13
  14. Flippy

    Wow. This is why I would never make it as an executive. I would worry more about my workers than myself and let them have the 100 million as a bonus for making me successful. You know he is already a very rich man.

    #14
  15. KaliGhoulish

    No wonder he’s got that big ole smile on his face!

    #15
  16. Waves

    While it’s all legal and business as usual – it’s obscene to the common worker in the company, insulting at very best….and the rich just keep getting richer -

    #16
  17. deaconknowgood

    With this kind of corporate greed, I can only hope that the IRS is all up his tax returns.

    #17
  18. FMS

    He’s 81…lucky heirs…

    #18
  19. Sirius Ashley

    O.K. Fowler, time to put the class warfare aside, the opposite of your feelings and what the Chronicle has instructed.

    #19
  20. eldicko

    when i stepped aside my company took me to dinner at pappas seafood on the gulf frwy.

    #20
  21. Pharmer

    The share holders should be all over this company. I would like to see what their stock does after this announcement. I would be pissed if I were a share holder. That’s why I invest my own funds: if I find out an imbecile like this is running the company, I can sell it short.

    #21
  22. Socrates

    This is obscene. This guy will walk away with over 125 million for doing a lousy job. That is 1/8th of a billion dollars.

    I am waiting for the people that are opposed to gov’t regulation and who oppose Occupy Wall Street to provide some perspective, so I can understand how this can be viewed as acceptable. Other than Isenberg, I don’t think anyone can justify this. How is this increasing shareholder profits? They should sue the company and replace the board for this travesty. Talk about a sense of entitlement.

    #22
  23. fencesitter

    i asked my BOD/CEO if I could get $100 million for stepping down, oh they had a good laugh before firing me and telling me that they would deny the unemployment. oh well always the lotto.

    #23
  24. warrendar

    Well, shareholders elected the Board, who approved the contract, so what’s the beef? If you don’t like it, elect a new Board at the annual proxy…Jeez.

    #24
  25. Howard Stern

    This is why Nabors has crummy equipment and a lousy reputation in the oilfield. Instead of spending money to improve their company, these two guys just lined their pockets. I guess this is where they got the say:”Paint it blue and make it new!”

    #25
  26. Sterling Minor

    Today, there is a headline that a lawyer committed a crime when he received over a $1million that those who game him the fully authorized. He apparently did not deliver what he promised. It is theft with a fancy name.

    The Nabors board of directors has authorized this transference of $100 million of shareholders’ money. It is theft with a fancy name. There will be no negative consequence to any of these thieves.

    We are a sick society.

    #26
  27. otimioo vasquez

    Poor man, 100 million dollars, he deserves evey penny, as for the rest of the peon workers who worked hard to build up the company, cut thier wages and lay some of them off.

    #27
  28. Roy Luck

    Several years ago I bought Nabors stock. It underperformed and I sold it. Then I found out about the executive pay packages. I have never considered buying Nabors again. That’s how you express dissatisfaction, sell the stock or don’t buy it. If the shareholders want to overpay the exec, that’s their problem.

    #28
  29. jeff roeske

    this is ridiculous and insulting………no one is worth that, except maybe steve jobs who actually produced something

    #29
  30. fedup

    Yeah, this is exactly the problem. They right their own ticket once they are in the fat cat seat…whatever happen to performance linked compensation, oh I remember that’s just for the 99% below the glass ceiling that get serious Performance Reviews.

    #30
  31. Chris

    Rabble rabble rabble. Now go watch some Hollywood movie and buy some pop musicians cd. There wasn’t nearly this many complaining when Charlie Sheen got 100 mil for being so coked up he couldn’t make a 30 min sitcom. This guy ran a multi billion dollar company that employed tens of thousands of people for years. Why should he make less than lebron James or jay z?

    #31
  32. Chris

    Yea Jeff unless you can buy it at best buy, it doesn’t exist

    #32
  33. Nico

    This is what has been wrong with the USA the past 30 years or so … the top 1% stealing money from the rest of us in bright daylight and getting away with it.

    #33
  34. Grrrr!

    He shall not go to Heaven!

    #34
  35. Dennis fish

    Step right this way to the gallows. No waiting, we had you on the list.

    #35
  36. rat618

    Sounds like he will be the next Republican Presidential contender.

    #36
  37. I’d join OWS for the chance to shout at this SOB.

    #37
  38. 420WSmithless

    You don’t need to be completely familiar with the concept of plutarchy to feel oppressed.

    #38
  39. This jerk is no better than Gadaffi as far as pocketing profits that should have gone elsewhere. May he get a stick in the end.

    #39
  40. matt

    When you’re 81 I think it’s called retiring, not stepping aside. Staying on as chairman is rather common. Not saying he’s worthy of that comp number at all, especially in light of the stock px, but it is misleading to imply that he is somehow quitting the CEO job or getting demoted (re: your “less responsibilities” snark of an intro).

    #40
  41. Daniel

    $100,000,000 is only 10 times what 11 families received when their fathers/husbands died while working for Nabors Industries – in one accident… How ‘out of touch’ can we become?

    #41
  42. Tom Fowler

    matt
    True, it’s most likely his personal choice. But this sum is from the same table that is used to calculate a payout if he was fired/demoted/etc.

    #42
  43. Paul

    Chris, are you not familiar with “figurative” language?

    You’re putting a lot of words in people’s mouths, too.

    #43
  44. profoundlogic

    Astonishing

    #44
  45. Best argument ever for high estate taxes.

    #45
  46. B #2

    I used to work in the Nabors building for a different company.. that picture is not exactly current… I was also lucky not to get run down in the parking garage by Mr. Petrello whilst he flew through it in his Mercedes…

    #46
  47. This could convince Michael Savage, Michael Berry, Rush Limbaugh, Sean Hannity, and Glenn Beck to join OWS.

    #47
  48. B #2: Dictators are know to use older, more flattering pictures.

    #48
  49. Tj

    Well, Richard Priest, why does it bother you so much how much money he makes? Envy? Jealousy? The hate is obvious. How does it affect you anyway? He did things you only wish you could do, but aren’t smart enough. He lived the American dream and you can’t. Maybe you should work on yourself and quit hating others because you don’t have the intelligence or the desire to do what he did, and the people he managed. I’ll bet you don’t get up at 5 a.m. and work every day for 17 hours for decades realizing your dreams and goals. Hater.

    #49
  50. Sal

    Forgot to add Nabors moved their “operations” offshore a decade ago back to avoid US Taxes. Because, you know, they couldn’t be competative paying for all those pesky US taxes.
    http://www.bizjournals.com/houston/stories/2006/07/24/story12.html

    He paid off Charles Rangel to get him not to fight against Nabors.
    http://www.nytimes.com/2008/11/25/nyregion/25rangel.html?pagewanted=
    all

    He got a payment to a school he was raising funds for an viola – he allowed Nabors the loophole. (Hes a democrat, you might want to note)

    #50
  51. ReneM

    If the stockholders of Nabors drilling have any sense, the board of directors will all be fired..

    #51
  52. profoundlogic

    Before announcing that he will step down, Isenberg probably said he “had a fiduciary responsibility to maximize shareholder value”. He would of course be referring to his own value as a “shareholder” in that alter-universe we call crony capitalism. To the rest of his common Nabors shareholders, he had these parting words….

    Let em eat cake!

    #52
  53. MikeP

    I’m not a big corporate compensation scold, but my impression from Chronicle compensation reporting over the years is that this has been longstanding practice at Nabors. Considering that the WSJ says that its stock has underperformed the S&P for the last 1, 5 and 10 year periods, these people may have some answering to do with shareholders. I wonder if it’s just the tip of the Isenberg?

    #53
  54. pacificoil

    Good heavens people are you serious? Nothing like a little jealousy to fuel this fire. I love the outcry for the “OWS” people to go to his house or for him to be strung from the gallows – seriously? Do you think the 99%’ers will do anything constructive regarding this? Better yet, do you think those protestors will come up with anything productive period around the country? I would love to see all you do-gooders react differently if put in this situation and offered $100 mil compensation. Would you give it back to the people? I think not. Also, Chris touched on it briefly above (the only other reasonable comment on here) comparing this to entertainment figures. Should OWS be occupying Peyton Manning’s house or protesting the World Series as Albert Pujols is asking for a quarter of a billion dollars in his new contract? These men play games for a living – at least this guy ran a global company and contributed to the energy cycle.

    #54
  55. Peter in Spring

    This is ridiculous. He is not worth 100 million. The company he heads might be. Hopefully the stockholders will stop sitting still for this and vote for once in the stockholders meetings instead of just blindly signing over their proxy to the board of directors. In fact replace the board of directors if they have so little respect for the stockholders. That is the stockholders money not theirs.

    And no I am not envious of him Pacifioil. Its just plain old fashioned common sense. Just because the secretary has a candy dish on her desk doesn’t mean you can take it all.

    #55
  56. Mojitos4All

    Where are the defenders of capitalism? They seem pretty quiet about now.

    Who appoints Members of the Board? (CEO.)

    This former CEO will still be chairman of said board.

    #56
  57. Maximusgary

    This entire game is rigged. The CEO is hired. The CEO then helps get his buddies on the Board of Directors some of which wind up on the Compensation Committee that determine the CEO pay. Is anyone really surprised when we continue to see headlines like this? It is all so cozy and the only loser is the shareholder that actually owns the company but has very little say. This needs to change!

    #57
  58. sam

    Work your butt off, get laid off. Become a CEO, jack the company up – “step aside” get $100.000.000K (was that to many 0′s)

    #58