You are hereCrooks & Liars: Transocean Awards Big Bonuses, Citing "Safety Record". WTF?

Crooks & Liars: Transocean Awards Big Bonuses, Citing "Safety Record". WTF?


April 2, 2011- You keep using that word...I do not think it means what you think it means:

Transocean Ltd. had its "best year in safety performance" despite the explosion of its Deepwater Horizon rig that left 11 dead and oil gushing into the Gulf of Mexico, the world's largest offshore-rig company said in a securities filing Friday.

Accordingly, Transocean's executives received two-thirds of their target safety bonus. Safety accounts for 25% of the equation that determines the yearly cash bonuses, along with financial factors including new rig contracts.

The payout contrasts with that for 2009, when the company withheld all executive bonuses after incurring four fatalities that year "to underscore the company's commitment to safety."

In a filing on executive pay, Transocean said, "Notwithstanding the tragic loss of life in the Gulf of Mexico, we achieved an exemplary statistical safety record." Based on the total rate of incidents and their severity, "we recorded the best year in safety performance in our company's history."

A spokesman for Transocean said, "The statements of fact in the proxy speak for themselves, but they do not and can not adequately convey the extent to which everyone at Transocean is keeping the families of the men who lost their lives at Macondo in their thoughts and prayers as we approach the first anniversary of the incident." Nine of the 11 dead worked for Transocean. Transocean uses two safety criteria to calculate executive bonuses: the rate of incidents per 200,000 hours that employees work, and the potential severity of those incidents. In 2010, the rate of incidents dropped by 4% from 2009.

Four whole percent? Wow.

For the record, 11 people died and 17 others were injured at the Deepwater Horizon explosion, which seems like kind of a rather significant black mark on Transocean's safety record, but maybe I'm just a nit-picker for details. At best, this is one of those classic blunders of hubris and tone deafness on appearance.

FULL STORY HERE:

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