Transocean, the proprietor of the oil rig that exploded and sank in the Gulf of Mexico doled out big “safety bonuses” over the weekend. Investigators have determined that Transocean was one of several companies liable for the Gulf oil spill. But the company said its safety performance last year was the best ever. After a firestorm of critique, Transocean declared the safety bonuses would be donated to the families of the 11 worked killed in the blast.
Safety bonuses in 2010 safety at Transocean
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.” On April 2, Transocean gave out executive safety bonuses saying that safety was amazing last year. 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 due to an explosion. Transocean justified the bonuses still: “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. Regardle! ss of the 2010 Gulf oil leak disaster, Transocean’s rate of accidents in dropped 4 percent from the season before.
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 leak might have been avoided. This was declared by the oil leak commission in January. The disaster happened due to negligence and errors by Transocean, Halliburton and British Petroleum. Due to these three businesses, including Transocean, “the greatest season of pain” in deepwater drilling occurred in 2010. 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 execs are donating bonuses on Tuesday.
Getting bonuses back won’t occur
According to the securities filing, safety accounted for 25 percent of Transocean’s 2010 executive bonuses. The top five execs received $898,282, about 45 percent of their targeted performance bonuses for the season. The safety portion of those bonuses totaled more than $250,000, which could be donated to the Deepwater Horizon Memorial Fund. Transocean has used the fund to distribute more than $1.6 million to the 11 families of the workers killed in the disaster. About $93,500 of that money comes from Transocean CEO Steven L. Newman. Last year, Newman made $6.6 million in all of the money he had coming in. The $650,000 in money Newman and his team can be keeping on top of the stocks and choices 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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