This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Nabors CEO Move Isn't Too Little, but It's Really Late

NEW YORK ( TheStreet) -- Before giving Nabors Industries (NBR - Get Report) Chairman Eugene Isenberg credit for giving up his right to a $100 million payment that was due to him for doing nothing more than retiring, keep in mind that this is a CEO who made $109 million in the past three years alone, during a period of time when his company woefully underperformed peers.

High oil prices have done nothing to help Nabors' market performance as Isenberg has helped himself to the company coffers.

Nabors Industries Chairman Gene Isenberg gives up $100 million, but he's already done quite well for himself at the expense of shareholders.

Also bear in mind that Nabors is undergoing a Securities and Exchange Commission investigation into excessive corporate perks at the expense of shareholders, as well as lawsuits brought by shareholders against the company and its board alleging similar abuse of shareholder money.

If anything, Isenberg simply realized he has gotten away with capitalist murder for enough years to call it quits since the heat was on him and his board.

Maybe the Occupy Wall Street world and the 99% has a little to do with it, but the truth is that the former Nabors CEO had already won the war on plundering Nabors' cash, so why push this last battle when it was getting more attention than anyone in the Nabors boardroom needed?

So the most tone-deaf man in corporate America isn't completely deaf; that's about all that was learned from this decision.

Also consider that the $100 million "contingent liability" payment had already been scaled back from $329 million it was set at originally in 2009 after shareholders balked, so Isenberg has always set out to take as much as he can get (away with) and then scale back plans based on the level of outcry.

Current Nabors CEO Anthony Petrello, hand-picked by Isenberg to replace him, has been provided with a similar $50 million "contingent liability" clause in his contract.

Isenberg told The Wall Street Journal on Monday that he had always planned to give away the money to charity anyway. A look at Isenberg's past approach to charity, though, should make one skeptical of that comment.

A charitable organization Isenberg created gives the after-tax proceeds from his salary -- not total compensation -- to education and disaster relief for Nabors' employees. Of Isenberg's total compensation in the 2008-2010 period -- $109 million -- only $3.2 million, or 2.9%, was in salary.

Regardless, the "charitable" comment from Isenberg is just the type of patronizing billionaire babble that one would expect from him in surrendering the $100 million: as Andrew Carnegie once said about not giving pay raises to steelworkers, he knew better what to do with the money so he should keep it for himself. In the case of Nabors, the point is that it's shareholders' money, not Isenberg's money, so let them invest in individual charities with some of their stock gains, that is, if Nabors ever makes them any money.

"Glad to see he did the right thing for a change. He'd taken enough. About time," said Argus Research analyst Phil Weiss.

About time is about right, and it came after so many wrongs that Isenberg is still walking away the winner, by a mile, and millions upon millions.

Nabors did not immediately respond to a request for comment on Isenberg's previous charitable giving as a percentage of Isenberg's total compensation; current CEO's Petrello's $50 million continent liability clause; or the impact of the SEC investigation and shareholders lawsuits on Isenberg's decision to forgo the payment.

-- Written by Eric Rosenbaum from New York.

RELATED STORIES:



>To contact the writer of this article, click here: Eric Rosenbaum.

>To follow the writer on Twitter, go to Eric Rosenbaum.

Follow TheStreet on Twitter and become a fan on Facebook.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
NBR $15.71 -0.82%
AAPL $132.54 0.88%
FB $80.54 0.07%
GOOG $540.11 -0.44%
TSLA $247.73 0.86%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs