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.
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Blame the company's board of directors for approving a golden parachute like this. The whole board should be voted out by the stock holders.
He deserves it becasue HE rescused the company from bankruptcy?
Oh, and I suppose he did ALL of the work himself, right? Maybe the headline should read "He developed a PLAN that helped saved the company from bankruptcy that he then pushed off on the companies middle class workforce to put into place, while he sat back eating caviar flying the jet on the company dime, laying off thousands of people, playing golf all day long and then taking a Platnium parachute (no gold here) when the going got tough because his plan may not have been successful after all.)
(Wow, what a run-on sentenace)
And what a big fat JOKE excuse for a human being, a poster child for the RepuliCON agenda.
Anyone who wants to blame President Obama for the "class warfare" idea has been out of touch with the American people for decades. Reagan's trickle down economics did NOT work, and that's when some Americans realized that the rich are only about getting richer. The idea that if you're NOT rich, you haven't worked hard! THAT is an insult to ALL Americans who have gone to work every day and increasing production for their company. The increased production wasn't rewarded with better wages! It was rewarded with jobs being outsourced and those left after layoffs being expected to do the job of 2 people.
I don't understand why there isn't a shareholder revolt in companies that dole out the exorbitant salaries and bonuses. Both the salaries and bonuses affect the dividends that shareholders receive. The only reason, in my guesstimation, is that the majority of the shareholders are A) part of the 1% already, or B) too dumb to realize that they are not receiving the dividends they deserve.
Class warfare started in the Reagan administration by the rich against the workers!
This sounds like the leaders and members of Congress. Their enrichment and abuse of congressional power is not made known on the media front pages like private industry. Private industry is not using taxpayer money for their excessive wealth and perks, while our elected/appointed officials ARE using taxpayer money. They made BILLIONS from insider trading, much more than this CEO the columnist is highlighting. If you want to know just how greedy our Congress is, just read the book "Throw Them All Out" by Peter Schweizer. It is scandalous what they got away with. And you can bet they will NOT make a law preventing this from happening again. They are having hearings right now, but the ones on the committee are ones that were guilty of the insider trading! So they certainly won't do anything about it!
The employees of his company are the victim of this guy raping the company, but the real fools are the people who invest in the stock market knowing that this goes on.
The stock holders get what they deserve, the employee don't.
This is a very good example of what American has turned and is turning into. A small group of individuals raping the American worker's and investors wealth.
Just another example of the rich getting richer at the expense of the working man and in this case even the corporate shareholders.
There is no one person worth millions of dollars in salary no matter how good he/she is or what they have accomplished. The President of the United States makes $400,000 per year. I know he has a lot of perks too but I am sure that those don't add up to 13M+.
This company needs to take a hard look at their P&L and then try to justify this kind of salary, plus the unlimited use of the corporate jet plus the unknown amount of spending this guy get reimbursed for as "expenses".
Tell me, exactly what did this guy do to be worth all that dough. Lay off workers, cut wages, cut benefits is what I would guess for starters. How else do you get a failing company out of the hole. The sad this is it only works for a short time and then the number catch up with you again as it appears to have in this case also. So in reality, did he actually accomplish any LONG TERM goal?
That is how you measure executive performance.
Not to mention putting hundreds of employees out of work by outsourcing to China and India!!!
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