Marty's Bon Mots (Selections found in: Glad You Asked)

Transocean's Bonuses

I was unaware of this until I just happened to glance past an article buried in the back pages. Do you remember a company called Transocean Ltd.? During the gulf oil rig disaster of 2010 when everyone was pointing fingers to determine fault finding, British Petroleum bravely pointed the finger at the builder and maintainer of the oil rigs. That company was, and remains, of course, Transocean Ltd.

These fine folk were right smack in the middle of the worst oil disaster in history. Right? Eleven people were killed, environmental disaster, wildlife destroyed, coast businesses ruined. Right?

Well, it seems that Transocean Ltd., in a recent filing with the U.S. Securities and Exchange Commission, noted huge bonuses and raises to its top executives and based all this on what they referred to as the company's "performance under safety" last year.

This must have raised a few eyebrows at the SEC.

"We acknowledge 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," Transocean said in a statement to CNN. "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."

As you might have expected, the statement did not address the controversy over the decision to give out cash awards despite the oil spill disaster.

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. Newman's bonus was $374,062, according to the report.

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.

"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."

The company called that record "a reflection on our commitment to achieving an incident-free environment, all the time, everywhere," the SEC filing said.

Let’s hear this again. “…our commitment to achieving and incident-free environment…” 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. And this was the best recorded year of safety performance in the company’s history?

My God, this can only mean that Transocean’s annual safety record must read like georgey bush’s gubernatorial execution rates, coupled with all the sensitivity of the Ukraine’s Chernobyl handlers.

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, calling the problems with deepwater drilling "systemic" and that only "significant reform" will prevent another disaster.

The oil spill has prompted a flood of lawsuits against BP, Transocean and Halliburton from a variety of plaintiffs, including owners of Gulf businesses who say 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 before the Gulf spill.

And yet it still remains. This was a banner year for Transocean and the hotshots get raises. And you wonder what causes populist revolutions?

posted by Marty Brounstein @ 12:24 PM