The ex-chief executive of drilling rig operator Nabors Industries gave up a $100 million departure payout after shareholder complaints of excessive pay, the company said Monday.
Eugene Isenberg, still chairman of the company after being replaced as CEO last October, "voluntarily" dropped the massive payoff written into his original contract as compensation for termination.
Isenberg, 82, also gave up $7 million in a deferred bonus. Together the amount would have amounted to 13 percent more than the company's entire net income of 2010, which followed an $86 million loss in 2009.
The move came in the wake of shareholder objections to what would have been one of the largest-ever severance awards in the United States.
In November a Pennsylvania employees' pension fund sued in a Houston court to halt the payout, charging the company's directors with "gross breach of their fiduciary duties" for granting "excessive and improper compensation" to executives, particularly Isenberg.
Isenberg was chief executive of Nabors, the world's largest operator of land-based drilling rigs, since 1987. He was replaced last October by longtime deputy Anthony Petrello, but remained on as chairman.
The $100 million payout was included in a new employment agreement between Nabors and the company set in 2009, for termination of his job "without cause". At the time the company argued it was a much better deal for shareholders than a previous agreement, which would have paid him $264 million.
The lawsuit showed that Isenberg had earned nearly $35 million a year in compensation over 2006-2010, with millions worth of other perks on top.
Isenberg said in a statement that he had always intended to donate the money to charity.
I ultimately concluded that everyone's interests, including the company's and our shareholders', were best served by this new arrangement."
The payout, though termed excessive in the suit, was still much smaller than the top departure award recorded by Forbes magazine, the $417 million that General Electric granted CEO Jack Welch when he retired in 2001.