Noble's outgoing boss bagged US$20m amidst US$5b loss

The remuneration is more than the US$15m than Noble has offered to pay its perpetual bondholders.

According to Bloomberg, Noble Group Ltd. handed its outgoing co-Chief Executive Officer Jeff Frase a remuneration package worth about US$20m last year, even as the commodity trader slumped to a record loss of almost US$5b.

The scale of the award, reported in Noble’s annual financial statements last week, is likely to provoke consternation as the embattled trading house attempts to secure agreement from its creditors and shareholders for a restructuring plan that would impose heavy losses.

The remuneration is more than the US$15m than Noble has offered to pay holders of its perpetual bonds, which have a face value of US$400m. Under the current debt restructuring plan, perpetual bondholders, which rank below other debt securities, will suffer a 96.25% loss in face value.

A person familiar with the situation said that the US$16.7m in emoluments included retention payments to ensure management continuity as the oil business was sold, explaining that it was a requirement imposed by the company’s banks in order to continue lending through the sale process. It also included a termination payment, and writing off a $5m loan from the company to Frase, the person said.

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