One more wallow at the trough for Nabors’ Isenberg

Isenberg: Just $100 million before I go… (AP)

You wouldn’t expect Houston’s most over-compensated chief executive to go cheaply into retirement, and Nabors Industries’ Eugene Isenberg didn’t disappoint. As the Chronicle’s Tom Fowler pointed out, Isenberg will get a $100 million cash send off as he relinquishes the CEO title to his hand-picked successor, Anthony Petrello. Isenberg will remain the company’s chairman.

Nabors said it will book the $100 million icing on Isenberg’s fat compensation cake as a contingent liability in its fourth-quarter earnings. Isenberg apparently is also eligible for a host of other goodies, including stock and options the company valued at more than $26 million.

Petrello, by the way, is no slouch in the pay department, either. He and Isenberg have both consistently ranked high on the Chronicle’s annual pay survey, and Isenberg’s been at the top of the list three times just since 2006.

Nabors has long justified the exorbitant pay of its executives by pointing out that Isenberg rescued the company from bankruptcy in 1987. As it noted in its press release announcing the change in titles:

“The Company and its shareholders are indebted to Mr. Isenberg for his many years of dedicated service,” said John Yearwood, Lead Director. “Under his extraordinary leadership, the Company grew from its emergence from bankruptcy in 1987 into one of the most successful oil service companies in the world. Gene’s knowledge of the capital markets, his in-depth industry experience, and his talent for identifying extraordinary investment opportunities were hallmarks of his successful 24-year tenure as Chairman and CEO.”

Since 1987, the Company has grown from a small Alaska-based drilling contractor with 38 rigs and negative shareholder equity of $35 million to a multinational company with operations in over 24 countries and shareholder equity of more than $5.6 billion. The stock price was $0.37 per share in 1987 and increased 50-fold over Mr. Isenberg’s tenure.

But how long should shareholders’ gratitude last? After all, Isenberg’s “extraordinary leadership” has done little for investors in the past five years. Nabors shares are trading about 40 percent below where they were in 2006, yet Isenberg continued to pull down those whopping pay packages that put him atop the list of Houston’s highest-paid executives during that period. This past year things have gotten worse. The stock has tumbled about 20 percent since January.

For Nabors’ investors, Isenberg’s value exceeded his cost long ago.