The Gulf oil leak cost lives and billions of dollars and for that Transocean execs received safety bonuses for 2010. Transocean’s Deepwater Horizon oil rig rests on the bottom of the Gulf, but the business said it set records for safety in 2010. The bonuses did not go over well with the public or the government and Transocean backpedaled by promising to give some of the money to a disaster victim charity. Post resource – Transocean execs donate safety bonus after firestorm of criticism by MoneyBlogNewz.
Safest year for Transocean in 2010
Transocean decided that there was a problem with safety in 2009 when four employees were killed on the job. This meant all executive bonuses were withheld “to underscore the company’s commitment to safety.” Safety last year was really good though, according to Transocean. This is why execs were given bonuses on April 2 for safety. There were 200 million gallons of oil put, for 86 days, into the Gulf of Mexico while 11 individuals were killed at the Transocean Deepwater Horizon oil rig because of an explosion. Still, Transocean said the bonuses were deserved. There were rationalized: “Notwithstanding the tragic loss of life in the Gulf of Mexico, we achieved an exemplary statistical safety record.” They used their total rate of incidents and severity to say, “we recorded the best year in safety performance in our company’s history.” To calculate safety bonuses, Transocean factors the rate of accidents per 200,000 employee ! hrs with a number that rates the severity of the accidents. The 2010 Gulf oil leak disaster was not that bad for Transocean’s numbers. Evidently there was still a 4 percent drop in the rate of accidents.
Transocean negligence discussed
A few days after Transocean declared the safety bonuses, Interior Secretary Ken Salazar was in Mexico City with members of the presidential commission that investigated the British Petroleum oil leak to discuss offshore drilling regulation with Mexican authorities. The 2010 Gulf oil spill may have been avoided. This was announced by the oil spill commission in January. The disaster occurred because of negligence and errors by Transocean, Halliburton and BP. Because of these three corporations, including Transocean, “the greatest season of pain” in deepwater drilling occurred last year. William K. Reilly, co-chairman of commission, called the Transocean bonuses “embarrassing.” To offset the PR destruction, Transocean issued an apology Monday for “insensitive” wording in the securities filing about the bonuses. Transocean said the top executives are donating bonuses on Tues.
Executives keep most of their bonuses
According to the securities filing, safety accounted for 25 percent of Transocean’s 2010 executive bonuses. The bonuses were at $898,282 for the top five executives. That is about 45 percent of the performance bonuses the whole season will give. The Deepwater Horizon Memorial Fund will get the safety portion of that. That is over $250,000. More than $1.6 million was distributed to 11 families of workers killed which Transocean has funded. Transocean CEO Steven L. Newman is on the hook for about $93,500 of that money. Newman made $6.6 million last year in the form of salary, bonuses, incentives, stocks, options and allowances. The $650,000 in cash Newman and his team can be keeping on top of the stocks and options as “long term incentives” given away.
Articles cited
Wall Street Journal
online.wsj.com/article/SB10001424052748703806304576236661289767034.html
New York Times
nytimes.com/2011/04/05/business/05transocean.html?src=busln
Forbes
blogs.forbes.com/jeffmcmahon/2011/04/06/transocean-execs-keep-most-of-their-bonuses/
CNN
cnn.com/2011/US/04/05/gulf.spill.bonuses/index.html?npt=NP1
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