Transocean Awards Bonuses For Safety Despite Gulf Oil Spill
The explosion and sinking of the Deepwater Horizon offshore oil rig killed 11 people last summer and resulted in an open well that gushed crude oil into the Gulf of Mexico for 86 days.
Transocean Ltd., owner of the Deepwater Horizon oil rig, recently awarded millions of dollars in bonuses to its executives after “the best year in safety performance in our company’s history,” according to an annual report and proxy statement released on March 22.
A Department of Justice criminal investigation into the ‘lack of a safety culture‘ exhibited by Transocean, BP and Houston-based Halliburton and how signs of the impending disaster were ignored because of pressure from BP executives.
“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,’ Transocean states in the filing. “As measured by these standards, we recorded the best year in safety performance in our Company’s history, which is a reflection on our commitment to achieving an incident free environment, all the time, everywhere.”
Because of his incredible commitment to ‘statistical safety’, Transocean President and Chief Executive Officer Steven L. Newman received about $4.3 million in cash bonuses and stock and option awards. His base salary, $900,000 in 2010, will increase 22 percent to $1.1 million in 2011 (Forbes).
And what exactly did Newman and the other Transocean executives do to demonstrate their unwavering commitment to safety and integrity in handling of the crisis once it occured?
“…Many of our senior executive officers… dedicated a significant portion of their time in 2010 following the Macondo Incident to responding to the needs of the victims’ families, coordinating the involvement of additional resources required to stem the flow of hydrocarbons, including drilling rigs and personnel to drill relief wells and other operations as requested by the Unified Area Command, cooperating with the numerous federal, state, and local reviews and investigations into the incident, overseeing our internal investigation of the incident, and managing other demands stemming from these activities, in addition to performing their normal responsibilities,” reads the report.
So in other words, they simply did the jobs they’re already paid to do.
Transocean’s directors also ask shareholders to shelter “the Board of Directors and the executive management From liability for activities during fiscal year 2010.” The company is being sued by some shareholders for failing to monitor risk leading up to the spill.
Although it claims the spill was an unforeseen disaster, Transocean did have the foresight to insure the Deepwater Horizon rig for about twice what it was worth. It was later reported that the company made a $270 million profit from insurance payouts after the disaster.
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