UPDATE 1-Nabors owners reject exec pay, want severance nod

Wed Jun 6, 2012 6:00pm EDT

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By Braden Reddall

June 6 (Reuters) - Nabors Industries Ltd investors delivered another rebuke to the oil driller by overwhelmingly rejecting its executive pay plan while seeking oversight of severance packages after its previous CEO nearly took $100 million with him out the door.

The severance proposal, presented at the annual meeting in Bermuda on Tuesday, sought shareholder approval of any senior executive severance above 2.99 times their base salary and bonus. Nabors said in a statement on Wednesday that 66 percent of its shares were voted in favor of the non-binding resolution.

Majorities also voted against the company's 2012 incentive bonus plan and stock plan, while three-quarters of the shares were voted against its executive compensation packages. Nabors shareholders rejected its executive pay last year as well.

Prior to the stock's 4 percent gain on Wednesday, shares in the land-rig contractor had fallen 50 percent in the last year.

Oil and gas investors generally have been flexing their muscles recently. Occidental Petroleum Corp, another company long known for its lavish executive pay, was forced by shareholder objections to rein in its 2011 compensation.

Also last year, 40 percent of Chesapeake Energy Corp shareholders voted against its top management pay packages, and the controversial perks of CEO Aubrey McClendon are likely to be discussed at length at its annual meeting on Friday.

Former Nabors Chief Executive Gene Isenberg, who was due to resign as chairman this month, opted not to collect his $100 million severance payment, which forced the company to take a charge for that amount when he stepped down as CEO last October.

California pension fund Calpers, backer of the severance proposal, said corporate governance groups had already deemed Isenberg's pay to be out of proportion with the other executives.

"All of this excessive compensation has occurred during a time period when the Company has severely underperformed its industry peers and the S&P 500," Calpers wrote in the voting materials ahead of the annual meeting.

The company responded by saying the severance arrangement for its current CEO, providing for a payment of three times the threeyear average of base salary and bonus under certain circumstances, would fall to two times that average in 2015.

"In short, the proposal seeks to solve a problem that doesn't exist," Nabors said.

Nabors also reported on Wednesday that 56 percent of its shares were voted in favor of a resolution to allow investors holding at least 3 percent of Nabors shares for three years to nominate directors in official voting materials.

"Once approved, this method of reforming an unresponsive board will be an important measure in protecting the pension fund and the retirement security of our public workers," North Carolina State Treasurer Janet Cowell said of the "proxy access" measure, which her fund had backed.

The vote was also applauded by Anne Sheehan, director of corporate governance at another California pension fund, Calstrs, another sponsor of the resolution. "At last, shareholders will have a fair voice in the boardroom of a major corporation," she said on Wednesday.

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