Former Nabors Industries Ltd. CEO Eugene Isenberg has turned down a golden parachute worth $100 million and $7 million in deferred bonus payments following criticism that his compensation was excessive.
In November, a Pennsylvania employees' pension fund even sued to stop the payout, Agence France-Presse reported.
Isenberg’s contract, negotiated in 2009, when he was 79, stipulated that Nabors would pay him $100 million if he was terminated “without cause,” AFP reported. The board may have felt as if they were getting a deal, since Isenberg’s previous contract would have sent him on his way with a termination payout of $264 million, according to AFP.
Last fall, the Houston-based oil and gas drilling company replaced Isenberg as CEO, but let him stay on as chairman, the Wall Street Journal reported.
According to the Wall Street Journal:
The payment – triggered in October when the board decided to promote longtime Isenberg lieutenant Anthony Petrello to CEO – would have been one of the largest termination payments in US corporate history. The payment also would have exceeded the company's third-quarter net income: $74.3 million on revenue of $1.66 billion.
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“I am fortunate to have been very successful in my career, and it has always been my intention to donate this money to charity,” Isenberg, now 82, explained in a statement, the Houston Chronicle reported. “I ultimately concluded that everyone’s interests, including the company’s and our shareholders’, were best served by this new arrangement. It is my hope that the company utilizes a substantial portion of these savings for worthy charitable purposes.”
In exchange for forfeiting his termination payment, Isenberg’s estate will receive $6.6 million from Nabors upon his death, the company said, according to the Houston Chronicle.
Institutional investors cheered the news.
"Mr. Isenberg has heard the message sent by institutional investors that excessive executive compensation is unacceptable and not in the long-term interests of shareholders," Connecticut State Treasurer Denise L. Nappier told the Wall Street Journal.