Adding tragedy to catastrophe, Patterson UTI CEO Andy Hendricks is receiving only a paltry $2.25 million bonus for 2017 because the safety portion of his bonus calculation (and their top executives) was eliminated as a result of the explosion that killed five Patterson UTI workers in Quinton, Oklahoma on January 22.
According to Energywire,
The company’s six top executives asked the board of directors’ compensation committee to waive any payout for the safety portion of their bonus calculation, according to a proxy filing last month with the Securities and Exchange Commission. According to the document, the Houston-based company had revised its system for determining executive compensation for 2017. The safety component was one of the changes.
The “key performance indicator” for safety judges the executives on “maintenance of Patterson-UTI’s leadership position in operating and safety standards.”
As his maximum bonus was $2.5 million, Hendricks apparently lost “only” $250,000. But we won’t lose any sleep over his loss. We’re pretty sure he’ll make out OK. “The bonus is on top of his $854,000 salary. His total compensation, including stock awards, was listed as $14,253,839.”
So, was the safety bonus designed to encourage the company to clean up its safety act? Something is surely needed, but clearly these paltry executive bonuses aren’t the answer to Patterson UTI’s chronic safety problems:
Patterson-UTI has a troubled safety record. Since 2008, when a U.S. Senate committee called the Houston company “one of the worst violators of workplace safety laws,” at least 12 of its workers have been killed on the job.
The company has said it was improving safety before the accident, investing millions of dollars in training and protective equipment. A statement released to news outlets after the explosion said the company sought “to instill a company-wide culture where safety is the top priority of each employee.”
About a month after the Quinton explosion, another Patterson worker was seriously injured by falling pipe at another well in Oklahoma.
The names of the employees killed in the explosion were Matt Smith, Parker Waldridge, Roger Cunningham, Josh Ray and Cody Risk. Pretty sure workers compensation was not as kind to their families as Patterson’s shareholders were to Hendricks.