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TheStreet Open House

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

Stocks in this article: NBR

NEW YORK ( TheStreet) -- Before giving Nabors Industries (NBR) 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.

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

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