Hercules Offshore, Inc.
Robbins Umeda LLP Announces an Investigation of Hercules Offshore, Inc.
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Hercules Offshore, Inc. (NASDAQ: HERO). Hercules, together with its subsidiaries, provides shallow-water drilling and other marine services to the oil and natural gas exploration and production industry. The company operates internationally, as well as in the U.S. Gulf of Mexico, providing development drilling, well maintenance, platform inspection, and other services. The company was founded in 2004 and is headquartered in Houston, Texas.
Robbins Umeda LPP’s investigation focuses on whether the directors and officers of Hercules harmed the company by breaching their fiduciary duties to shareholders. In particular, Robbins Umeda is investigating the decision by the board to substantially increase executive compensation by as much as 90% between 2008 and 2010, despite sagging stock prices and plummeting revenue. In 2010, the board approved a salary increase for Hercules’s Chief Executive Officer John T. Rynd from $1.317 to $2.516 million and a similar increase for Chief Financial Officer Stephen M. Butz from $333,000 to $963,000. However, between 2008 and 2010, Hercules’s revenue fell from $1.11 billion in 2008 to just over $657.48 million in 2010. Additionally, the company’s stock price cratered to as low as $1.16 per share in March of 2009, after trading as high as $38.31 in June 2008. Notably, on May 10, 2011, a majority of the company’s shareholders expressed their disdain for this and other executive pay packages by rejecting the company’s 2010 Chief Executive Officer and top executive compensation levels. Notwithstanding, Hercules’s board has failed to rescind the 2010 pay hikes.
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