Nabors’ charity effort pales against executive pay

When Nabors Industries’ overpaid chairman, Eugene Isenberg, agreed last week to give up his $100 million severance, the word “charity” came up a lot. Isenberg himself said he hoped that the company used “a substantial portion of these savings for worthy charitable purposes.”

The “savings” apparently refers to the money the company’s long-suffering shareholders won’t have to pay Isenberg.

Meanwhile, Isenberg’s successor as chief executive, Anthony Petrello, said: “The company intends, subject to future operating results, to make charitable contributions to benefit the educational and other charitable needs of its employees and to benefit other community-based causes.” Petrello specifically cited the Nabors Charitable Foundation, a tax-exempt charity that Isenberg set up to provide college scholarships for children of Nabors employees. Isenberg, he noted, contributed his annual salary to the charity since 2009.

Eugene Isenberg (AP)

Isenberg’s base salary was $1.2 million in 2010. That was before taxes and also included $47,500 in directors fees.Yet he donated less than $466,000 to the charity, according to the Nabors Charitable Foundation’s annual report filed with the Internal Revenue Service.That’s less than 38 percent of his base salary and a little more than 3 percent of his total compensation of $13.5 million for the year.

Nabors itself gave almost $124,000, and the charity awarded almost $319,000 in scholarships and gave about $3,600 for disaster relief in Haiti.

Those contributions, by the way, are the only ones on record. Tax records for the two previous tax years show the charity received no contributions, and in 2009, it didn’t award any scholarships or make any donations for disaster relief. In the 2008 tax year, it awarded $14,000 to three Nabors’ employees for Hurricane Ike relief.

During that same period, Isenberg received almost $109 million in total compensation from Nabors.

No one, of course, can say how much is appropriate for anyone to give to charity, and providing almost a half a million dollars for scholarships is admirable. The problem is that Nabors has touted the charitable giving as an excuse for its exorbitant executive pay, as if that somehow should make shareholders feel better for paying so much for the stock’s poor returns in recent years.

Below is the latest tax return for the Nabors Charitable Foundation. I’ve omitted the last few pages, which list the names of the students who received the scholarships.

Nabors 990 2010