Onshore drilling giant Nabors Industries has rejected the resignation of three board members who make up the company's compensation committee after less than a majority of shareholders voted to keep them on.
Nabors said in a security filing that the board members, who are required to tender resignations if they do not received the backing of a majority of shareholders, will stay on after a unanimous decision by the rest of the directors to reject the resignations.
"The board determined that acceptance of their resignations would not be in the company’s best interests and voted unanimously to reject the resignations," the filing said.
After consulting shareholders for the rationale behind the lack of support, Nabors determined the compensation committee was paying the price for investor ire over the lofty pay packages in prior years for executives like chief Anthony Petrello.
Nabors argued that Petrello's compensation package had been "materially" chopped when it was restructured last year.
The board members on the compensation committee "were instrumental in implementing the drastic changes in management compensation which now place Nabors within the range of comparable oilfield services companies in terms of management compensation levels", the company said.
However, the board made some concessions in light of the vote. It removed directors Michael Linn and John Yearwood from the compensation committee and replaced them with John Knotts and James Crane.
It also expanded the size of the board from seven to eight directors and added a new, independent director recommended by our largest shareholder.
"The board determined that an additional independent voice with diverse experience and the support of our largest shareholder would provide an additional element of independent oversight that would mitigate any remaining concerns over board composition," Nabors said.
Last year, Lombardi and Yearwood also each received less than a majority of supportive votes but were kept on.
The new director - Dag Skattum, managing director of an Africa-focused investment firm was recommended by Nabors' largest shareholder, London-based Pamplona Capital Management.