Remember awhile back when longtime Houston-based Nabors Industries Ltd was facing Congressional scrutiny over its efforts to minimize its tax obligations by maintaining its registration in Bermuda (or was that Barbados?)? Well, that little dust-up may be nothing in comparison to what emerged for Nabors over the holidays.
Last week, the Wall Street Journal ($) ran this article reporting that longtime Nabors CEO that Eugene Isenberg is among the highest-paid corporate executives in history, receiving more than $450 million in compensation over the past 19 years, much of which was generated through the exercise of stock-option grants whose value the WSJ contends was enhanced by certain “controversial moves” made by the company. The WSJ article alleged that the company allowed Isenberg to trade in certain worthless options for new ones with lower exercise prices and “reloaded” Isenberg with new options when he cashed in others.
A day later, Nabors announced that it was initiating a further review of its option-granting practices in light of “issues raised” in the WSJ article. This current review follows an earlier internal review of the company’s stock-option practices since 1998 that the company contends “did not suggest that there was reason to question the propriety” of its option-granting practices.
Nabors has enjoyed a meteoric rise over the past 20 years or so, similar to that of another Houston-based company that the WSJ latched its teeth into awhile back.
Stay tuned.