Transocean's Bonus Blunder
I could have told you how this movie would end as soon as it started.
Last week officials from Transocean, the world's largest offshore-rig company, which owns the now-infamous Deepwater Horizon rig, announced that they were giving themselves bonuses based partly upon their exemplary safety record for the year.
Four days later they announced they were donating their bonuses to charity.
As far as PR hurdles go this one had a degree of difficulty that would make an Olympic gymnast cringe, and one that I am sure battered and bruised Transocean executives are wishing they never tried to attempt.
This was the worst oil spill in the history of America and for months it outraged our nation. To suggest that the company executives deserved a bonus, regardless of how stellar the rest of the year was, was a tough sell. As Bill Raftery, the great CBS College Basketball announcer would say, "Onions."
To be fair, the officials were not oblivious to the reaction they would receive, acknowledging the "tragic loss of life in the Gulf of Mexico" in their filing and spelling out a safety calculation based on the number of incidents during the year and their severity. I am sure to a group of people sitting in a boardroom it made complete sense. They also strategically made the filling on Friday afternoon. Unfortunately for them a few people still read the newspaper on Saturdays.
When the news became public the outrage was predictable. Newswires, blogs and twitter were awash in anger and for Jon Stewart it may prove to be one of the best gifts he gets all year.
The pressure on Transocean was too much and it reversed course. The money, approximately $900,000 from five executives, will be given to the families of the victims.
In the end the company should have probably taken a page from the playbook of the beleaguered financial services industry. In 2008, after the industry equivalent of a multi-million barrel oil spill, executives from Citigroup, Bank of America, Morgan Stanley, JP Morgan and Goldman Sachs at least had the good sense to forfeit their bonuses. They were smart enough to know to stay quiet, try to hold onto their jobs and hope for better days ahead. I am guessing the Transocean executives are wishing they had done the same. 