Even in bankruptcy, oil bosses are promised riches
Even in bankruptcy, oil bosses are promised riches
Six years ago, Houston oilman Floyd Wilson struck it rich with the blockbuster sale of Petrohawk Energy, making billions for investors and earning a reputation as a farseeing wildcatter.
His
next venture, Halcón Resources Corp., fell prey to the oil bust. The
company slashed more than a third of its workforce, wrote down billions
in assets and filed for bankruptcy, almost completely wiping out
shareholders.
But
when the Houston company finished a six-week trek through bankruptcy
court in September, Wilson emerged enriched again, with new shares in
the reorganized company that would push the value of his annual
compensation package up to $24.1 million, a figure that dwarfed his pay
packages in previous years, worth $3.4 million on average, according to
regulatory filings.
In
the teeth of a merciless downturn that lasted two years, oil companies
laid off thousands of workers and investors lost billions as scores of
drillers and service firms went bankrupt. But in recent months, several
of these same firms are emerging from bankruptcy as reorganized
companies and carving out hefty pools of restricted stock and options
for executives and top employees who were in charge when things went
south.
The
practice, ostensibly aimed at keeping experienced management teams in
place during turbulent times, appears to reward executives who take
companies into bankruptcy rather than disciplining them - even as
shareholders lose their investments, corporate governance experts said.
There's a fine line, they said, between keeping executives involved in
the company and over-enriching them.
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