CNN: Despite Gulf oil spill, rig owner executives get big bonuses.
Makes you wonder what happened in their not so good years.
(CNN) -- Declaring 2010 "the best year in safety performance in our company's history," Transocean Ltd., owner of the Gulf of Mexico oil rig that exploded, killing 11 workers, has awarded its top executives hefty bonuses and raises, according to a recent filing with the U.S. Securities and Exchange Commission.
That includes a $200,000 salary increase for Transocean president and chief executive officer Steven L. Newman, whose base salary will increase from $900,000 to $1.1 million, according to the SEC report. Newman's bonus was $374,062, the report states.
Newman also has a $5.4 million long-term compensation package the company awarded him upon his appointment as CEO in March 2010, according to the SEC filing.
The latest cash awards are based in part on the company's "performance under safety," the Transocean filing states.
"Notwithstanding the tragic loss of life in the Gulf of Mexico, we achieved an exemplary statistical safety record as measured by our total recordable incident rate and total potential severity rate," the SEC statement reads. "As measured by these standards, we recorded the best year in safety performance in our Company's history."
HUH!!??
The company called that record "a reflection on our commitment to achieving an incident-free environment, all the time, everywhere," the SEC filing states.
The company did not respond to an e-mail from CNN seeking comment.
The April 20, 2010, explosion on the Deepwater Horizon rig injured 17 workers and killed 11 others, including nine Transocean employees, according to the SEC filing. It has been called the worst spill in U.S. history.
The well was capped three months later, but not before millions of barrels of oil spilled into the Gulf.
In January, President Barack Obama's National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling released a report that spread blame for the accident among Transocean, BP -- which leased the rig -- and Halliburton, which installed the rig's cement casing.
The commission said problems with deepwater drilling are "systemic" and that only "significant reform" will prevent another disaster.
Another report released March 23 determined that the oil spill was caused by a piece of drill pipe trapped in the rig platform's blowout preventer, a device intended to stop oil from flowing into the Gulf. The report was commissioned by various U.S. agencies, including the Interior Department and the Department of Homeland Security.
The Interior Department has said a much broader report that relies on additional sources of data -- including eyewitness accounts and photographs -- will be released this summer.
The oil spill has prompted a flood of lawsuits against BP, Transocean and Halliburton from a variety of plaintiffs, including owners of Gulf shore businesses who claim they suffered heavy financial losses because of the spill.
The plaintiffs also include Transocean shareholders who contend the company falsely claimed it had remedied past safety problems with its blowout preventers, prior to the Gulf spill.
Views: 66
Replies to This Discussion
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Permalink Reply by Keith Mauck (Site Publisher) on -
You are giving me those monday-morning warm fuzzies.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Pretty bizarre stuff, huh? It's those dang mandatory SEC filings that are at fault. There is a reason they are public record.
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Permalink Reply by Skip Peel - Mineral Consultant on
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I'm content to wait for the release of the full investigation results before assuming how much fault lies with each of the companies involved. I posted this because Transocean is making a mistake IMO by trying to defend the bonuses regardless of their being appropriate or not. They would have been better served by a no comment than by releasing these ill advised statements. It's likely they are clueless but they come off as arrogant. Poor PR at a time when it should be avoided at all costs.
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Permalink Reply by Max on
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Read the fine print:
total potential severity rate
Set your total potential severity rate @ 100%, beat that rate by 95% and your measure of success is fantastic. Raises and bigger bonus for me.
By the time the law suites and finger pointing comes around, you're long gone, along with a big sack of money.
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Permalink Reply by Skip Peel - Mineral Consultant on
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"Transocean Regrets 'Insensitive' Wording in Filing" - WSJ article
HOUSTON—Transocean Ltd. on Monday said it regrets "insensitive" wording in a recent securities filing in which the contract driller called 2010 its "best year in safety performance" despite the deadly Deepwater Horizon disaster.
Transocean owned the Deepwater Horizon rig, which was drilling a deepwater well in the Gulf of Mexico for BP PLC last April when it exploded, killing 11 and unleashing the largest offshore oil spill in U.S. history. Nine of those who died were Transocean employees.
In a securities filing known as a proxy statement, the world's largest offshore driller said Friday that its executives received two-thirds of their target safety bonus, which accounts for 25% of the formula that determines annual cash bonuses.
"Notwithstanding the tragic loss of life in the Gulf of Mexico, we achieved an exemplary statistical safety record," the proxy said.
Speaking in Mexico City early Monday, U.S. Interior Secretary Ken Salazar and William Reilly, co-chair of the presidential panel that investigated the disaster, criticized the company's language. Transocean's remarks were "embarrassing," Mr. Reilly said.
"It's been said with respect to the disaster that some companies just don't get it," Mr. Reilly told reporters during a conference call. "I think Transocean just doesn't get it."
Mr. Salazar said that 2010 "was probably the greatest year of pain in terms of oil and gas development in the deep water all across the world and especially in the Gulf of Mexico," and said Transocean was "at least at some fault" in the Deepwater Horizon disaster.
Ihab Toma, Transocean's executive vice president of global business, acknowledged in a written statement issued Monday that "some of the wording in our 2010 proxy statement may have been insensitive in light of the incident that claimed the lives of eleven exceptional men last year and we deeply regret any pain that it may have caused."
"Nothing in the proxy was intended to minimize this tragedy or diminish the impact it has had on those who lost loved ones. Everyone at Transocean continues to mourn the loss of these friends and colleagues," Toma said.
In the proxy Transocean had said that based on the total rate of incidents and their severity, Transocean "recorded the best year in safety performance in our company's history."
Transocean executives received no safety bonuses in 2009 when four employees died on the job.
Write to Ryan Dezember at ryan.dezember@dowjones.com
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Permalink Reply by Mac Davis on
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Are any of the people complaining stockholders of Transocean?
If not, then what I pay my employees is none of your &#$^@ business, thank you!!!
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Permalink Reply by essay on
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my dollar cost average for RIG is less than 55 bucks a share, thanks to the spill. this was a pretty boneheaded move on their part.
btw people probably don't even want to know what i bought BP at, lol.
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Permalink Reply by Skip Peel - Mineral Consultant on
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When we consider the wider national debate of energy policy outside of the echo chamber that is GHS, it is helpful IMO to hold in mind that the majority of Americans do not live in areas with historic oil and gas production and the possibilities of royalty income do not impact their mind set. Discount the 30 or so percent that are solidly anti-oil and gas and the like number that are solidly in the Drill-Baby-Drill camp and you have somewhere in the range of one third of American voters that are concerned about the future price of energy particularly the gasoline or fuel oil that takes a growing percentage of their family budgets but who also have environmental concerns and suspicions of corporate responsibilities to issues they care about. It is unwise to discount the impact of burning drilling platforms, natural gas pipeline explosions in residential neighborhoods and the sight of burning kitchen faucets on the local television news. Those of us with a little knowledge understand that these are not wide spread incidents, or at least they haven't been in the past, and that the chances of them impacting any one of us is quite low. Some like the faucets are in the majority unrelated to drilling activity.
The energy industry is likely to end up like the auto accident victim run over by a truck running a red light. Hopefully the knowledge that they had the green light will make up for the unavoidable fact that they have just been run over. The industry oft times is its own worse enemy when it comes to currying public favor. And those of us who support a more aggressive national energy policy and in particular the maximum use of natural gas can only sit by and wonder at the eventual outcome. And in the meantime, the costs of inaction.
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Permalink Reply by Max on
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So, lets change the story a little bit and see if it's your business or not.
I own a business that pumps out septic systems. One of my drivers is driving too fast and his truck along with a load of poo turns over in front of your business. I come and haul off my truck, but I leave the poo there, some of it even splashed up on your door.
You call the authorities and I pay someone to go to your business and clean up the mess. The person I hired to do that job is a little slow, and they don't show up for a couple of weeks. In the mean time, you don't have any customers because no one likes to step in poo.
When the clean-up crew does show up, they water hose for awhile and then leave. The poo is gone, but the smell is still there. You still don't have any customers because no one likes to smell poo. A few months later you're out of business.
On your way home from shutting your business doors, you pick up a newspaper and there on the front page is a story about my company giving bonus to my drivers because they've met a safety target set up by me to improve my bottom line.
Your remarks; &#$%****!!........$#^&$%#.........#$@@^&&*%!
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Permalink Reply by essay on
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if it had been me i would have done the cleanup myself asap, kept the money, and partnered with you to start a new fertilizer business and hired charlie sheen to do the marketing, because he's so good at shoveling ____ it would have been a win/win/win
of course that's not realistic because somebody from the federal government would have kept me from taking independent action, probably citing the "environmental impact" of all the bleach i was going to use.
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