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Transocean, the world’s largest offshore rig company, awarded its executives bonuses for 2010, citing “the best year in safety performance in our company’s history,” in spite of the Macondo disaster in the Gulf of Mexico, according to a regulatory 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,” Transocean said in a 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.”
The Macondo disaster, which involved the explosion, burning and sinking of Transocean’s Deepwater Horizon rig, killed 11 people (nine of them Transocean employees) and injured 17 before leaking oil into the gulf for three months in the industry’s highest-profile accident since the 1989 ExxonMobil Valdez spill in Alaska.
Transocean has blamed BP, as operator, for decisions that led to the accident, while BP has said its contractors bear some responsibility.
The Swiss-based company agreed to compensate executives in a decision especially notable after bonuses were withheld in 2009 to underscore the importance of safety following four deaths.
Transocean said it sets the compensation of its executive officers based on their ability to achieve annual operational objectives that further the company’s long-term business objectives and create sustainable long-term shareholder value.
The company approved base salary adjustments averaging a 3.8 per cent increase per individual, excluding the chief executive, whose base salary reflected his promotion into the CEO role.
In addition, given that Transocean’s bonus plan provides for cash awards based on performance under safety, financial, newbuilds and enterprise resource planning objectives, the company determined to pay cash performance awards for fiscal 2010 at 44.8 per cent of the target bonus opportunity for each individual.
The company also approved long-term incentive awards in the form of stock options and addressed retention concerns with “special one-time retention awards.”
“The Committee determined that the cash performance awards made to the named executive officers for 2010 were appropriate in recognition of the company’s achievement of the objectives set at the beginning of 2010 relating to significantly improving the company’s safety record and the successful implementation of our enterprise resource planning system,” Transocean said.