Transocean - Safest Year ever

Executives we're awarded millions of dollars because they had "the best year in safety" or did their safety record have no bearing on the bonuses? If its the latter, I'll have to chalk this article up to poor, biased journalism. Either way, did anyone expect anything different?

 

If 2010 was their best year in safety what were their other years like?

 

Stuff like this just adds further evidence to the idea that the wealthiest people in this country are completely disconnected from taking any real responsibility for their actions.

They are bad for this country.

 

I would like to congratulate Transocean on their amazing year -- may their flawless safety continue on for the next generation.

 

we need one of our in-house counselors because this maybe the key to ridiculousness

they maybe trying to avoid liabilty to their execs

 

I was curious, so I looked it up. You can see it here: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODgyMDl8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1. Start on page P-35 (page 49 in the .pdf). I would have quoted from it if Adobe Acrobat would have let me.

But, essentially the officers were paid 44.8% of their target bonus for their performance in 2010. They were measured on safety (25%), cash flow value added (50%), new builds (10%), and Enterprise Resource Planning (15%). So overall, they didn't have a great bonus year (for them) and it was only partly based on safety -- though safety probably makes up the majority of the money they did get.

Also, officer salaries are suprisingly modest (supposedly on track with median compensation in their peer group). The CEO makes about $1m, and the others less than $0.5m per year. The target bonus for the CEO is 100% of salary, and it's 75% or less for the others. Of course, they have stock options and stuff like that too to get more money from.

However, the report also mentions they officers were awarded a 3.8% increase to their base salaries, stock option plans, and (for some) retention awards. It seems to me the intent might be to give back with the left hand what the right hand had taken away.

In sum, I think the journalism isn't too bad -- looks like they got compensated for safety near or at the maximum amount despite the Deepwater Horizon. That safety bonus was worth roughly $250k to the CEO, and probably $50-100k to the others.

I don't have a big problem with it -- they set these policies at the beginning of the year with certain defined measurements. The definitions neglected to include worldwide infamy, so they have to pay out. If they don't pay, the officers will sue and win. This year though, I think they should have some kind of clause that says complete catastrophe invalidates all safety bonuses.

 

So....apart from that, Mrs Lincoln, how did you enjoy the play?

(having a hard time conceptualizing their assessment of 'potential severity rate' at the beginning of the year when Deepwater doesn't nudge the achieved record away from 'exemplary').

 

if they are blaming this disaster on BP in the courts, maybe they can justify it not bring down their record

 

I don't know who will/is being ultimately held liable, but if none of the problems in Deepwater Horizon were related to Transocean's responsbilities, it could make sense. Looking at stock prices - which is not a full measure - BP hasn't gotten close to where it was prior to the disaster, but RIG (Transocean) is basically back to their original levels. That may be an indication that RIG has been cleared of responsibility in the mess.

 

Conversely, taking action against execs for Deepwater Horizon could provide ammunition to litigants who would use that to say Transocean implicitly claims fault. They can't fire them, so they give them a medal.

 

SWIM works for Transocean LTD.

The explosion killed 11 Transocean employees. It was caused by a failure of the BOP which is manufactured by Cameron. The rig is owned by BP and leased to Transocean Offshore, and thus the failure of the BOP is a result of negligence of British Petroleum employees and equipment.

Transocean Offshore and Transocean LTD didn't do (or not do) anything that resulted in what happened. BP did. In a way, they are the victims of BP.

All the work that SWIM has done in the past year is to sift through the thousands of lawsuits that continue to pour in. It's a mess, a real tragedy, but they had a safe year otherwise.

Incomplete journalism.

 

I thought the rig was owned by transocean and leased to BP. cameron did make the valve that failed, i saw that on Rachel Maddow's show. i had just interviewed over there three weeks ago. another failure, sigh

 

you are correct, i misspoke. the rig is leased to bp by transocean. the well is BP's. BP employees are the ones who do the regulatory checks however, and the wellhead is what burst sending the fire up to the rig. again, the failure of the blow out preventer (BOP) was the problem here. it's whole purpose is to shut off the well so the rig is protected. i can't really go into it, but suffice it to say BP missed a few things before the explosion. criminal things.

as far as the executives and their compensation, SWIM hates it more than you do. i do feel bad for the CEO, though. the board is full of jack-offs but steven newman is not one of them. he is one of the nicest and smartest men i've ever met, and while that doesn't qualify you to run an oil-company or absolve you from blame, SWIM has personally seen the pressure he has had to perform under and i'd say he's done magnificent. he made tony hayward look like a drunk during the federal inquiry.

 

60 minutes did a piece on the disaster i think less than a month afterwards, i mentioned on here then. albeit from the perspective of a transocean employee on the rig, he pretty much said that it was bp who was giving the all clears despite info that the preventer wasn't working properly. his main point however is that it was ultimately bp's call

 

You are misinformed. I can safely say that any decision to shut down the rig, or to power through despite warning signs, has to be made by BP engineers, and Transocean engineers on the site are left only with the ability complain up the ladder. Save for the Board itself halting drilling operations, which is more improbable than myself shutting down the Horizon, Transocean's contract with BP restricts us from making the decisions you are insinuating we made (or refused to make).

Please, show us what you are reading. Prove me wrong.

I am not defending the Deepwater Horizon disaster. I was not on the rig. It is above my pay-grade to be privy to such decisions as they are made. I am just representing my experiences in dealing with the investigations, lawsuits, and aftermath, which are extensive, and trying to appropriately assess the blame, just as you all are. I have read literally thousands of external reports and lawsuits detailing what took place. We are certainly not proud of what happened, but the preventative measures that should have taken place clearly fall under BP's jurisdiction.

If you think it is an easy kill to hate Transocean LTD for oily ducks and bonuses, try working for the machine. It isn't Steven Newman's fault though.

 

some BP emails before disaster

 

transocean also has apologized for the language in it's proxys

 

Isn't anybody going to point out the moniker irony? I'm ashamed of you guys.