Aligns CEO Compensation with Industry Peers and Responds to Shareholder
HAMILTON, Bermuda, March 7, 2013 /CNW/ - Nabors Industries Ltd. (NYSE:NBR)
today announced that it has entered a new employment agreement with Chief
Executive Officer Anthony Petrello to more closely align his compensation with
Nabors' shareholders' interests and industry peers.
The new five-year agreement, which replaces Mr. Petrello's 2009 agreement well
before its scheduled expiration, resulted from the Board's comprehensive
review of the Company's compensation practices following last year's annual
shareholders meeting, together with input from shareholders. Effective
January 1, 2013, the new agreement:
-- Eliminates death and disability benefits valued at $50 million;
-- Abolishes uncapped cash bonuses and the bonus metric based on
excess cash flow over an equity hurdle;
-- Subjects more than 80% of Mr. Petrello's target annual
compensation and more than 90% of his maximum annual
compensation to financial and operational objectives;
-- Caps termination payments at 2.99 times base salary and bonus;
-- Continues to require Mr. Petrello to maintain equity ownership
of Nabors shares at five-times his annual base salary.
John Yearwood, Nabors' Lead Director, commented, "Over the past several years,
Nabors has made significant strides in overhauling its compensation system to
ensure that its leadership teams are properly incentivized to, and rewarded
for, returning value to our shareholders. It was important to Tony and the
rest of the Board that his compensation structure be based on the same
principles that are in place for the rest of our employees and that his
compensation be solidly aligned with our shareholders' interests. To that end,
Tony willingly gave up numerous benefits he had under his prior agreement, and
entered into a new agreement that strikes an important balance between
retaining a key executive and incentivizing a focus on shareholder return. We
are pleased that our CEO compensation and benefit program is now consistent
with our peers."
The new agreement sets Mr. Petrello's annual base salary at $1.7 million and
offers an annual incentive cash bonus targeted at base salary and capped at
twice that amount, subject to measurable financial and operational objectives.
It also subjects long-term equity incentive awards to performance goals based
on total shareholder return (TSR) relative to a peer group and other financial
and operational objectives. The minimum and maximum payouts for annual and
long-term equity-based incentive awards are significantly lower than under the
prior employment agreement, and the hurdles to reach both the minimum and
maximum payouts are more stringent.
The cash savings attributable to benefits and compensation voluntarily
relinquished by Mr. Petrello is significant over the term of the contract. In
consideration for terminating the prior agreement and entering into the new
agreement under which long-term stock awards linked to TSR performance are not
eligible to vest before 2016, Mr. Petrello will receive a one-time stock grant
valued at $27 million, which will vest immediately, $18 million in cash, and a
one-time award of restricted shares valued at $15 million and scheduled to
vest through 2016.
The relevant agreements will be filed with the Securities and Exchange
The Nabors companies own and operate approximately 474 land drilling rigs
throughout the world and approximately 548 land workover and well servicing
rigs in North America. Nabors' actively marketed offshore fleet consists of
36 platform rigs, 12 jackup units and 4 barge rigs in the United States and
multiple international markets. In addition, Nabors is one of the largest
providers of hydraulic fracturing, cementing, nitrogen and acid pressure
pumping services with approximately 805,000 hydraulic horsepower currently in
service. Nabors also manufactures top drives and drilling instrumentation
systems and provides comprehensive oilfield hauling, engineering, civil
construction, logistics, and facilities maintenance and project management
services. Nabors participates in most of the significant oil and gas markets
in the world.
The information above includes forward-looking statements within the meaning
of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such
forward-looking statements are subject to certain risks and uncertainties, as
disclosed by Nabors from time to time in its filings with the Securities and
Exchange Commission. As a result of these factors, Nabors' actual results may
differ materially from those indicated or implied by such forward-looking
statements. The projections contained in this release reflect management's
estimates as of the date of the release. Nabors does not undertake to update
these forward-looking statements.
For further information, please contact Dennis A. Smith, Director of Corporate
Development & Investor Relations, at 281-775-8038. To request investor
materials, contact Nabors' corporate headquarters in Hamilton, Bermuda at
441-292-1510 or via email at firstname.lastname@example.org.
PRN Photo Desk, email@example.com
SOURCE: Nabors Industries Ltd.
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-0- Mar/07/2013 23:32 GMT
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