HOUSTON – The board of Geneva-based oil field service firm Weatherford International has voted to shift its corporate headquarters to Ireland later this year, six months after the Swiss government handed investors authority to rein in top-drawer executive pay.
The move allows the company “to operate at the lowest possible cost while enhancing the company’s ability to retain, as well as further attract, the best women and men in the industry,” Weatherford Chairman, President and CEO Bernard Duroc-Danner said in a written statement late Wednesday.
The Swiss Federal Council passed an ordinance last November that will allow company shareholders to make binding votes on executive and board member compensation, beginning next year. It prohibits severance payments to departing top brass. Swiss law has for years given investors an edge in corporate affairs. For example, one rule allows investors to oust directors without giving cause if they muster two-thirds of the shareholder voting rights.
In regulatory documents, Weatherford predicted the “cumbersome and costly” changes might significantly affect its governance practices and its ability to keep talent. The new compensation rules, Weatherford said, “could lead to confusing and inconsistent proposals to our shareholders” and contradictions in U.S. Securities and Exchange Commission disclosures on pay.
The company, which has retained its main operational office in Houston after it moved to Switzerland five years ago, will call a shareholder vote on the move in June. If shareholders agree to the proposal, the Swiss Weatherford parent company would merge into a new subsidiary called Weatherford Ireland, which would take the role as the publicly traded parent of Weatherford’s companies. It would keep its tax residency in Switzerland and continue to report to U.S. securities regulators.
Duroc-Danner said moving to Ireland will help the company curb costs as it cuts into some of its businesses and its workforce.
“The execution of our planned divestitures is essential” to the company’s future, he said. “Incorporation in Ireland will best ensure that we reach our goals as we embark on a new chapter in our history.”
Earlier this month, the company agreed to sell its pipeline and specialty service business to Baker Hughes for $250 million, the first of four units that the Swiss company is planning to unload for up to $1.3 billion combined. The slate of units on the sales block include its land drilling rig and drilling fluids businesses.
Weatherford is also planning to chop its workforce by about 10 percent of its 67,000-employee payroll across the globe.
Weatheford shares dipped 10 cents in early trading Thursday to $17.38 on the New York Stock Exchange.