Nabors Industries Ltd. (NBR), the world’s largest oil-drilling companies, will pay outgoing CEO Gene Isenberg $100 million in cash as a result of provisions in Isenberg’s employment agreement. Isenberg is 81, and has led Nabors since 1987.
Jeff Dietert, an analyst at Simmons & Co., an energy investment bank in Houston, wrote his clients yesterday that “We believe the compensation to Mr. Isenberg is excessive,” noting that handing over $100 million payment “for what we view as essentially retiring will be offensive to some.”
May be excessive? Offensive to some?
Here’s what I would hope would be going through Mr. Isenberg’s mind about now:
“Boy, this looks awful. Here we have a worldwide financial crisis, with soaring unemployment, banks collapsing, homes being lost, lives in tatters, and angry people rallying in cities across the country that the system is rigged to enrich people like me while 99% of the public gets screwed…and I’m taking home a cool $100 million for leaving my job.
I know that it’s not my fault that I cut a good deal for myself, and I’ve played a crucial role in earning billions for this business. Still, I’m ashamed to be taking a payout like this, and my company should be ashamed to pay it. Heck, I’m 81, and I’m already rich as hell! What do I need 100 million for…to build a pyramid?
“I keep thinking of all the good that money could do for people who are having a hard time. I could use it to help college grads pay off their student loans. Maybe I could use it to launch a business, or several businesses, in economically depressed areas. What might really do some good is for me to use the attention focused on this obscene payment to call for an end to absurdly disproportional executive compensation packages. I could challenge other executives to do the same, and call out those who don’t!
“In the final chapter of my life, I could be a catalyst for reforming a corporate compensation system that seems rotted out by conflicts of interest, irresponsibility and greed. I can’t just accept the benefits of that system, knowing that it’s wrong. I have an obligation to try to change it.”
That’s what I hope I’d be thinking, in his position. You never know, however, how $100 million will warp your values.
Is there any chance at all that Gene Isenberg is thinking these things?
[To read an excellent analysis of what is wrong with Isenberg’s bonanza, check out Chris MacDonald’s Business Blog.]