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Corporate Greed: Noble Corp To Pay Exec Bonus Ahead of Bankruptcy Filing

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   |    Friday,July 03,2020

Drilling Contractor,  Noble Corp. has enacted a new incentive program for its key employees, according to its recent 8-K filing with the SEC.   The company has not filed chapter 11 yet, but it is close.  This filing seems to following similar strategy where financially strapped companies.

Whiting, did the same thing here, when it paid executives before filing chapter 11.   Chesapeake also issued millions its executives only to file bankruptcy earlier this week.

The company stated in the filing: "In response to the ongoing significant market uncertainty, the Board [has] approved modifications to the Company’s overall compensation program on June 26, 2020 to more appropriately retain and motivate its key employees during this period of uncertainty and increased workload. The Board worked with compensation and other advisors to design and appropriately align the revised program."

While specific details weren't disclosed (aside from incentives for CEO Robert Eifler - see below), the information pertaining to exec and non-exec employees is below. Access the full filing here.

Executive Employees

The target value of the 2020 annual bonus awards granted under the Noble Corporation plc 2020 Short-Term Incentive Plan (the STIP) and the value of 2020 restricted stock unit awards and performance-vested cash incentive awards granted under the Noble Corporation plc 2015 Omnibus Incentive Plan (the LTIP) to certain executives, including our named executive officers and designated vice presidents, will be paid as soon as practicable.

President & CEO Robert W. Eifler, who was promised an incremental award under the LTIP in connection with his appointment to the roles, will be paid such amount promptly as follows (first announced in its February 2020 8-K filing):

  • base salary of $675,000 per year
  • a target bonus award for calendar year 2020 under the Company’s short-term incentive program of 110% of base salary (~$743,000), subject to achievement of performance metrics to be established by the Board
  • a target award of $2,800,000 under the Company’s long-term incentive plan (more than double compared to last year's award of $1.0 million)

Non-Executive Employees

To maintain the stability and continuity of the Company’s workforce, one-half of the target value of the 2020 annual bonus award opportunity granted under the STIP will be paid to certain non-executive employees as soon as practicable and will not be subject to repayment. The remaining one-half will be converted into an opportunity to earn cash retention payments on a quarterly basis for the third and fourth quarters of 2020, subject to their continued employment.

 

Noble Corp Debt Profile

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