Human Capital & Careers

Newspaper Sparks Nabors Review

A Wall Street Journal article Wednesday prompted Nabors Industries to reopen its internal investigation into its stock option granting practices.
Stephen TaubDecember 29, 2006

Nabors Industries Ltd. said that it will once again review its option granting practices as a result of issues raised in an article published Wednesday in the Wall Street Journal.

The oil driller had previously reviewed its option granting practices dating back to 1998, and concluded that there was no reason to question the propriety of its practices.

On Wednesday, however, a long story in the Journal detailed how Nabors CEO Eugene Isenberg and other executives allegedly made huge sums from their company’s stock option practices.

“As a result of issues raised in today’s Wall Street Journal article, the company is initiating a further review of its option granting practices,” Nabors said in a press release the morning the article was published.

The press release noted that Nabors undertook a “precautionary internal review” earlier this year of its own stock option practices extending back to 1998. That review, which was prompted by disclosures and news reports of option dating problems at other companies, “did not suggest that there was reason to question the propriety of the company’s option granting practices.”

The Journal pointed out in its story that Nabors has in the past repriced Isenberg’s options when the stock fell below the strike price. The article also noted that when Isenberg exercised some of his options, the company “reloaded” him, awarding him new options equal to the number that were exercised.

Some of CEO Eugene Isenberg’s “option grants appear to raise questions about how they were dated,” the article asserted.