Transocean exec set for smooth sailing…

March 3, 2011

Since Transocean Ltd’s. (RIG) Deepwater Horizon drilling platform burned and sank last April, a lot of the press has related to that accident. In the past week or so, there have been articles such as this one (how the company could face a material adverse effect if its relationship with BP, plc (BP) deteriorates), or this one (noting that the stock prices for Transocean and other oil and gas drilling companies rose after the United States approved the first deepwater drilling permit since the moratorium on drilling was lifted in Oct. 2010).

But all of that happened a couple of months after Transocean bade farewell to its seasoned CEO, Robert L. Long, who retired Feb. 28, 2010, after spending approximately 35 years with the company. As one might expect upon the retirement of such a long-tenured executive, Long left the company with a nice payout. But exactly how nice hadn’t been disclosed until Transocean filed its preliminary proxy yesterday.

The largest chunk of Long’s payout was a retirement distribution of more than $13.88 million. But he also got some other sizable payments (such as a “Swiss individual tax at source” payment of $222,994, and a tax equalization payment of $190,311), as well as smaller ones (a tax gross up payment on his perks of $12,552, a cost of living adjustment of $14,648, and more).

Long’s retirement payout was nearly $8 million nicer than it would have been without the intervention of Transocean’s Executive Compensation Committee of the Board of Directors. Just a few days before Long retired last year, the committee voted to accelerate the vesting of his stock options and time-vested restricted share awards. It also decided to give him the full payout (instead of a pro-rated share) for his performance-based contingent deferred units. If the board had not acted, Long would have forfeited all of that money.

Long had just relocated to Switzerland the year before he retired. We know from the 2010 proxy that Transocean reimbursed him $73,909 for his move; and it also gave him a $71,602 cost of living adjustment, a $133,095 housing allowance, and it paid his Swiss wealth tax of $386,916. (For whatever reason, it only cost about a third as much – $26,504 – to move Long after he turned in his keys in 2010.)

But now that he’s retired, and the Deepwater Horizon matter is left for others to sort out, presumably he’s got the time and financial retirement cushion to do as he pleases.

Image source: Transocean’s website

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