Unwittingly, Nabors Industries CEO Payout Makes OWS Case—and We Add the Philanthropic Info

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October 31, 2011; Source: Wall Street JournalIt is the irony of the times. Just as the Occupy Wall Street movement continues and deepens its attack on the concentration of wealth in the U.S., the Wall Street Journal reports on one of the wealthiest corporate severance payouts in many years. Nabors Industries (an oil drilling company) is rewarding its chairman and CEO, 81-year-old Eugene Isenberg, with a $100 million cash severance for giving up the CEO title, although he remains chairman of the company (and will continue to earn a not too shabby salary for that modest job). Note that the original severance deal was for $264 million until shareholders objected.

This isn’t compensation for Isenberg’s having been underpaid over the years. TheJournal cites one source that puts Isenberg’s total compensation for 1999 to 2009 at $518 million. Another source cited by theJournal ranked Isenberg “one of the previous year’s five highest-paid, worst-performing U.S. executives,” because of the lousy performance of Nabors Industries against the S&P 500—or maybe because in 2010, within his total compensation of $13.537 million, he pulled down a bonus of $9.734 million that some might have considered unwarranted.

Put the severance payout in perspective. The $100 million for Isenberg is more than the entire company’s third quarter net income of $74.3 million. The highest paid corporate executive in the U.S. last year was Phillippe Daumon, of Viacom, who earned only $84.3 million—and even that was just $13.9 million in cash, with the rest in one-time stock and options awards, compared to the all-cash payout to Isenberg. As a severance payout, it is larger than the $65.7 million that Sanjay Jha will get if he leaves Motorola Mobility Holdings after its pending acquisition by Google.

Here’s another perspective: the philanthropic lens. Compare the severance (or the severance plus Isenberg’s astronomical compensation levels) to the philanthropic output of the Isenberg Family Charitable Trust and the Nabors Charitable Foundation.


Isenberg Family Charitable Trust grants payout

Nabors Charitable Foundation grants payout























The corporate grantmaking appears to be primarily disaster relief assistance for Nabors employees (probably hit by the many passing hurricanes in the Gulf) and scholarships for the children of Nabors employees through the Isenberg Educational Fund. The family grantmaking is big on high-profile institutions of particular interest to Isenberg—the University of Massachusetts at Amherst (where he graduated, and where the school of management is named after him), the Martha’s Vineyard Hospital ($600,000 between 2007 and 2009—Isenberg has a home in the Vineyard), the Palm Beach Opera (more than $500,000 since 2003—Isenberg has a home in Palm Beach), the Houston Grand Opera (where the firm is located), and the Parkside School (at least $750,000 from 2007 to 2009 for this Upper West Side private school for children with language-related learning disabilities).

Isenberg is philanthropically generous to lots of causes, even some politically progressive groups ($125,000 total in three grants since 2004 to Human Rights Watch and an odd $1,420 grant to the Jewish Funds for Justice in 2004), and the operas, hospitals, and schools are undoubtedly grateful for Isenberg’s charitable largesse. But his and the corporation’s philanthropy pale next to the size of his multiyear compensation and one-year semi-severance payout. Is this the kind of unchecked self-indulgence of the 1% that the Occupy crowd decries?—Rick Cohen 

  • Glenn

    While I agree that there are issues that are ligitimate concerns that need to be addressed related to excess compensation and greed, the current strident discourse only polarizes the parties that needs to sit together in order to fix what is broken.

    People’s beliefs and behaviors are changed by truth, facts, evidence, not by words and actions that are hateful, mean spirited, destructive, abusive, accusatory, blaming, intended to harm. When someone’s spirit is offended they are no longer able to listen or hear what you have to say, even if what you have to say is right and true. There is a proverb that says “the power of life and death is in the tongue and those who love it will eat its fruit.” In other words by the way we speak, we will produce either life or death. Too much of the current discourse (on both sides) is not producing life. What is the true motivation, imporvement or destruction? Why isn’t the media asking this question and facilitating a discussion that brings the opposite sides together instead of focusing on the differences and division?

    I am afraid we will once again miss a unique opportunity to come together and make needed improvements in the way we live together because we are more focused on demanding recognition of our individual opinions and rights.

  • John S.

    Glenn, you are right in principle. The problem is that the 1% (and I include much of the media that is owned by and operated to benefit the 1%) has not been particularly interested in “truth, facts and evidence,” and has in fact been bullying, mean-spirited, abusive, etc., to the 99% for the past 25 years at least.

    What are we to do when politics in not producing the needed change in society? No leaders are emering to pull us together, so we must do it ourselves. We had the opportunity to unify and make this a country that is truely for all after 9/11/2001, but that opportunity was turned into a vehicle to divide us further, and in fact shows us a direct path the the current financial mess.

    People’s views are driven by emotion, as most of us who raise money for nonprofits know. Emotion is what we need to change the system.