Weatherford Int’l. Execs to Get Soft Landings…

May 26, 2010

June 15 is going to be a very expensive day for Weatherford International Ltd. (WFT), a Swiss-based multinational company that provides products and services for oil and natural gas wells in more than 100 countries. That’s the day when two top executives, Keith Morley and Jessica Abarca, will leave the company but substantially increase their personal net worth.

Morley, the departing SVP — Well Construction & Operations, joined the company in 2001. Abarca joined the company in 1996 and worked her way up to the position of Vice President — Accounting and Chief Accounting Officer.

The company filed a short 8-K on May 24, 2010 to announce the upcoming departures, name the executives— successors, and note this one-sentence disclosure:

—In connection with Mr. Morley’s and Ms. Abarca’s exercise of their employment agreements, we anticipate recording an expense of $12.0 million in the quarter ending June 30, 2010 and making cash consideration payments of $24.5 million in the quarter ending December 31, 2010.

Both executives signed new employment agreements with the company on December 31, 2009. One day later, on January 1, 2010, the company adopted a new Supplemental Executive Retirement Plan. In the 8-K that the company filed on New Year’s Eve, the filing stated that the new agreements contained changes pertaining to the company’s redomestication from Bermuda to Switzerland and revisions to ensure that the company’s plans complied with the Internal Revenue Code.

The company hasn—t yet disclosed how much of the $24.5 million will go to Morley and how much will go to Abarca. However, Weatherford’s May 13, 2010 proxy discloses that Morley was eligible to receive nearly $17.5 million if he left the company for —good reason (Abarca is an executive, but not a NEO; thus, numbers for her are not stated in the filing.) The company further noted that ——the freezing of the SERP may constitute —good reason— for five of our executive officers, including Dr. Duroc-Danner, Mr. Becnel and Mr. Morley, to terminate their employment under their employment agreements. Of course, it also added, —The actual amounts to be paid out can only be determined at the time of, and depend upon the circumstances surrounding, such named executive officer’s termination.

Regardless of the final numbers, though, the size of their exit packages is surely a bitter pill for the thousands of employees who have been laid off in the past few years with comparatively tiny severance packages.

Image source: Photos8.com via Flickr

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