By Matt Andrejczak

A stockholder proposal calling for investor approval of executive death benefits at Nabors Industries Ltd. (NBR) was voted down at the oil and gas driller's annual meeting Tuesday.

Based on a preliminary tally, the measure got 40.5% of the shareholder vote, according to Scott Zdrazil, director of corporate governance at Amalgamated Bank. The bank's LongView Funds, which owns 80,194 shares in Nabors, sponsored the proposal.

Amalgamated had proposed that Nabors get shareholder approval for agreements that award unearned salary, bonuses and other compensation to executives' estates if they die. In shareholder activist circles, these arrangements are called "golden coffins."

Despite not receiving wide-spread support, Zdrazil said in an email it was "a high vote for a first year proposal and a strong sign of investor concern."

Officials at Nabors couldn't be reached for comment.

Golden-coffin arrangements have come under shareholder scrutiny this year. The deals pay an agreed-upon sum to the spouse or the estate of an executive if they die while still on the job. The agreements, which have become more common, vary by company.

Nabors had urged its shareholders to vote against the proposal.

In Nabors' case, the death benefit package for CEO Eugene Isenberg equals $100 million, plus equity grants valued recently at $39 million. The deal for COO Anthony Petrello is $50 million and equity grants recently worth $17 million.

The contract driller has taken steps to appease critics of the arrangements.

The company on April 1 struck new deals with Isenberg and Petrello, lowering the total collective payments by more than $200 million.

In its proxy statement, Nabors argued the post-life benefits are a small component of its executive pay packages. They contend golden-coffin deals can help attract and retain executives who seek economic security for their families in the event of their death.

Under the old agreement, if Isenberg had died, became disabled or was terminated without cause at the end of 2007, Nabors would have paid more than $260 million in cash severance, according to its proxy filed in April 2008.

Amalgamated commended Nabors for renegotiating the deals, calling it a step forward. But it believes that senior executives have ample financial resources to purchase life insurance or contribute to a pension while they are alive. The union-owned bank also claims golden coffins go against the idea of paying executives based on performance.

Critics often refer to golden-coffin deals as "pay-for-no-pulse."

The bank has been pushing for shareholder approval of golden-coffin deals at Johnson Controls (JCI), Shaw Group (SGR), and XTO Energy (XTO).

Amalgamated's proxy proposal won 66% of the vote at Shaw Group, but was narrowly defeated at XTO. It got 42% of shareholder support at Johnson Controls, according to Con Hitchcock, outside counsel for Amalgamated.

He said the movement is paying some dividends. "I'm encouraged that companies have been taking a closer look at these agreements," Hitchcock said.

- Matt Andrejczak; 415-439-6400; AskNewswires@dowjones.com