Last Friday, oil driller Nabors Industries announced its long-time CEO Gene Isenberg would be replaced by President and COO Anthony Petrello. However, the only thing anyone really cares about is Isenberg’s monster $100 million cash package for stepping down.
The terms of his payout were laid out in Isenberg’s updated employment agreement, which was released in 2009.
In the event that the Executive’s employment is terminated on the basis of the Executive’s death, subject to the provisions of Section 8.2, Nabors Delaware shall pay or provide, as applicable, to the Executive’s estate or his designated beneficiaries, as the case may be, within 30 (30) days of his death (or such earlier date provided below), the following: (a) The fixed sum of One Hundred Million Dollars ($100,000,000.00), representing a negotiated amount taking into account the Executive’s entitlements under the Amended Employment Agreement, the Executive’s concessions under this Agreement, and the anticipated term of this Agreement;”
However, it turns out he could’ve gotten a lot more. According to the 8-K that accompanied the employee agreement, his old employment agreement would’ve gotten him more than double what he’s getting.
Elimination of previous formulas for severance payments in the event of death, disability, termination without cause, or constructive termination without cause and substitution of lower amounts. Based upon December 31, 2008 values, Mr. Isenberg’s severance payment entitlement was reduced from a formula that would have yielded a $264 million payment to a flat payment of $100 million.
Isenberg’s huge compensation packages have been under scrutiny for years. His renogiated termination package came after shareholders told Nabors’ board that they had had enough.
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