Nabors Rejects Two Directors’ Resignations

Bermuda-headquartered Nabors Industries, the world’s largest land-rig contractor, defied a majority of shareholders who voted not to re-elect a pair of directors by refusing to accept the resignations of the board members.

Directors John Lombardi and John Yearwood received support from about 4 percent and 47 percent of shareholders, respectively. According to company policy, they two men tendered their resignations at the end of the annual meeting Tuesday [June 4].

However, “after considering the current structure of the board” and “the company’s strategic needs”, among other things, the Nabors board rejected the resignations, having determined that acceptance “would not be in the company’s best interests”.

The board “voted unanimously to reject the resignations”, though Mr. Lombardi and Mr. Yearwood “did not participate in the deliberations or the vote”.

Nabors — which has its operational headquarters in Texas — listed the two men among the five re-elected director nominees.

In a filing with the US Securities & Exchange Commission, Nabors also said that a proposal to give certain shareholders proxy access, or the right to nominate directors, had not passed, even though the measure had received a majority of votes cast.

The company counted non-votes, totally some 23.1 million, as votes against the measure. By those calculations, about 46.7 percent of voters supported the proposal for proxy access.

New York City comptroller John Liu, who had introduced the proxy-access proposal, criticised the results in a statement seen by “The Wall Street Journal.”

“The Nabors board’s decision to reject the resignations of two directors who failed to receive majority support at the meeting demonstrates exactly why Nabors’ shareowners urgently need proxy access,” Mr. Liu said in a statement.

Nabors spokesman Dennis Smith defended the company’s methodology, the “Journal” said.

“This year’s results are in very strict conformance with the law in Bermuda,” he told the newspaper, adding that there was “no intentional change” in the way the company tallied non-votes.

Shareholders also rejected an advisory “say-on-pay” proposal; rejected a proposal to require shareholder approval of specific performance metrics; and rejected a shareholder proposal to require shareholder approval of certain severance agreements.

“We value our shareholders’ input and look forward to continued productive dialogue aimed at addressing any ongoing concerns,” chief executive Tony Petrello said in a statement.

Nabors, which has a market capitalisation of about $4.87 billion, has come under pressure for exorbitant perk and compensation packages for its executives.

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