Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right?

Eugene Isenberg, CEO of Nabors Industries, was listed in a 2006 Wall Street Journal article as one of the highest paid executives in the U.S. over the previous 14 years. He received this compensation as a result of a unique bonus arrangement and large stock option grants with several favorable features. At the same time, the strategy that he implemented for Nabors led to a remarkable financial turnaround as the company emerged from bankruptcy and expanded to become a global leader in the oilfield services industry. Readers of the case are asked to evaluate the structure of Isenberg's compensation agreement with Nabors Industries in light of the company's industry, strategy, and financial position. Particular consideration is paid to the total compensation, mix of compensation, performance measures, and other compensation terms.