CEO sheds title, collects $100 million
One-Percenter of the Week: Eugene Isenberg collected huge paychecks and racked up miles on the corporate jet while his company's stock languished.
By Michael Brush, MSN Money
The tax-and-budget debate in Washington and the Occupy Wall Street protests have put new light on an old issue: the growing gap between the rich and everyone else.
I’ve been writing for years about a select slice of the top 1%, those CEOs and top executives whose lavish pay and perks annoy watchdogs, shareholder advocates and big investors like pension funds. But despite their complaints, we never seem to run out of examples of executive privilege.
Take the simple act of getting around. Now that camping has been banned at New York’s Zuccotti Park, Occupy Wall Streeters have to ride in to the protests using the transportation of the 99%-ers -- subways, buses, cars and the ol' shoe leather express. One percenters prefer limos and the corporate jet.
One of my favorite examples of corporate jet overuse is Eugene Isenberg, chairman of Nabors (NBR), an energy services company. He stands out for a couple of reasons.
A $100 million salute
First, Isenberg makes a lot of money; he could easily afford a first-class ticket on a commercial flight, and buy the seat next to him for extra comfort. He could at least reimburse the company when he uses the corporate jet for personal travel, and spare shareholders the expense. That's because the company reported $71.9 million in compensation for him in 2008, $23.2 million in 2009, and $13.5 million in 2010.
And here's the juiciest part: When he gave up the CEO slot recently, he got a nice parting gift -- a cool $100 million payment. And it’s not even goodbye; he’s staying on as chairman. He just has one less job,
The company has long argued that he deserves this cash because he rescued the company from bankruptcy in 1987. That may be true, but the company’s stock is down 40% in the last five years. The latest payment led a columnist in Houston, where Nabors is based, to label Isenberg his city’s "most overpaid executive."
Second, despite his vast wealth, Isenberg has apparently taken frequent personal flights on the corporate jet to his homes, all paid for by shareholders, according to a study by The Wall Street Journal. What's even worse, the company has not disclosed these trips to shareholders.
In a study using flight records published in June, the Journal reported that Nabors' jets made frequent stops in Palm Beach, Fla., and Martha's Vineyard, Mass., where Isenberg has homes. The Journal estimated the flights cost about $704,000 -- large enough to be disclosed publicly. But Nabors never disclosed an amount for the cost of aircraft perks for Isenberg in 2009 or 2010.
In June, a Nabors spokesman told the Journal that the company "complies with all IRS guidelines and SEC disclosure requirements with respect to the use of company aircraft by its executive officers." And under his contract, Isenberg is allowed to set up home offices, at the company expense. So that may be a rationale for the flights here: technically, he might have been making business trips between corporate offices, two of which happen to be in or near his homes.
Nabors declined an opportunity to tell me more about these flights. But we may soon be learning more about them. The company recently said the Securities and Exchange Commission is investigating executive perks, including personal flights on company jets.
Meanwhile, for collecting all these big checks and still, apparently, finding a way to get shareholders to pay for his flights to and from home, I'm making Isenberg my first "One-Percenter of the Week." I plan to have a new one every week.