Halliburton paid execs retention bonuses for 2002
April 9, 2003
By Erwin Seba###
HOUSTON, April 9 (Reuters) - Halliburton Co. paid top executives an undisclosed amount of retention bonuses to stay with the company in 2002 as its stock slumped due to mounting asbestos
liabilities, a regulatory filing made on Wednesday said.
The bonuses were paid to unidentified "senior and key" executives of
the world's No. 2 oilfield services company who were with Halliburton
between Feb. 1, 2002, and Jan. 1, 2003, according to proxy statement
filed with the U.S. Securities and Exchange Commission on Wednesday.
"Due to a depressed stock price from concerns over the company's
asbestos litigation, this was a step to retain personnel in leadership
roles," said Halliburton spokeswoman Wendy Hall.
Hall declined to reveal the identities of the executives or the amounts
paid to them, but said fewer than 50 employees received retention
The bonuses were given even as the Houston-based company declined to
raise the base salary of Chairman and Chief Executive Dave Lesar and
other top executives because of the bad business environment and
uncertainty over energy prices.
But the company did give out the retention bonuses plus, equity grants
and dividend-style payments on the outstanding stock options of its top
executives as part of its plan to keep key executives.
Since the retention bonuses were given this year, the amounts do not
have to be revealed until the executive compensation for 2003 is
disclosed in the 2004 proxy, Hall said.
Until December, when Halliburton announced a $4 billion settlement of
more than 300,000 asbestos injury claims against it, the company saw
its stock price and credit ratings tumble as asbestos lawsuits and jury
The injury claims are from workers who said they developed a form of
cancer linked to asbestos exposure. Halliburton subsidiary Dresser
Industries operated Harbison-Walker Refractories, which made an
industrial furnace cement containing asbestos.
Halliburton purchased Dresser when U.S. Vice President Dick Cheney was
chief executive of the company. Cheney left Halliburton in 2000 to join
President George W. Bush's Republican presidential ticket.
ON THE RISE?
Since the global asbestos settlement, Halliburton has seen its fortunes
shift for the better. On March 24, its engineering subsidiary KBR was
awarded a Defense Department contract to rebuild Iraq's oil
However, some Democratic members of Congress are seeking an
investigation into how Halliburton got the contract without going
through a competitive bidding process.
In the proxy, Halliburton said Lesar's base salary was unchanged in
2002 at $1.1 million. He received a bonus of $1.7 million in 2002, compared
with $2.2 million in 2001.
Lesar also received 308,810 restricted shares worth $4.482 million in
2002 compared with 154,407 shares in 2001 worth $3.381 million. The
shares are vested over 10 years.
In the proxy, Halliburton is recommending shareholders vote against a
proposal by shareholder Amalgamated Bank LongView Collective Investment
Fund to limit future executive severance packages to two times base
salary unless shareholders approve a higher amount.
Currently, the company would have to pay Lesar five times his base
salary and the value of restricted shares outstanding if he is fired,
according to the proxy. If Lesar and the four other top Halliburton
executives left, it would cost the company over $10 million, according
to Amalgamated Bank's proposal.
Adoption of the proposal would undermine the company's ability to
attract and retain senior executives, Hall said.
(Reporting by Erwin Seba; editing by Eric Walsh;
Reuters Messaging: [email protected];
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