Greedy chief executives are the reason behind "unpatriotic" US companies moving to Bermuda, according to one of the anti-Bermuda contingent in Congress.

In a story in the New York Times and the International Herald Tribune (www.iht.com) printed yesterday, David Cay Johnston, reported that heads of companies will benefit more than shareholders from the move to Bermuda.

The article headlined: "Bermuda address can add to executives' wallets, too", claims that executives could gain tens of millions of dollars in pay by the move.

He states: "The parade of companies that in recent months have proposed incorporating in Bermuda to reduce their US taxes usually provide the same rationale: They are doing it to increase their profits and benefit their shareholders.

"But left unsaid is another fact: The biggest beneficiaries could actually be the chief executives of these companies.

"At a minimum, these executives could pocket millions in additional pay. In some cases, they could well take home extra pay equal to half the company's tax savings or more. In effect, the government's loss in taxes is the chief executives' gain, in the form of higher pay, bonuses and profits on sales of stock options."He added that while each company's Bermuda strategy differed in details, chief executives "always profit" because their compensation was based partly on the profitability of the company or its stock price and he said that if taxes fall, both would be expected to rise.

He added: "But in some cases, such as that of Stanley Works, other shareholders may not fare nearly so well because many would owe taxes that the chief executive does not."

He named Eugene Isenberg of Nabors Industries Inc., John Trani of Stanley Works, H. John Riley Jr. of Cooper Industries Inc., Herbert Henkel of Ingersoll-Rand Co. and Bernard Duroc-Danner of Weatherford International Inc. as being "among the chief executives who stand to benefit".

He said: "At Nabors Industries, the world's largest operator of land-based oil drilling rigs, Isenberg could see his pay rise by tens of millions of dollars each year if shareholders approve on June 14 his plan to incorporate in Bermuda and establish the company's legal residency in Barbados, said Brian Foley, an executive compensation lawyer who analysed Isenberg's employment contract.

"Over the past two years, Isenberg has made more than $126 million, including profits from the sale of stock options, from a company with $2 billion in annual revenue. That is partly because his contract pays him 6 percent of the company's cash flow - a measure of profit before certain charges are subtracted - once the cash flow exceeds a certain amount.

"The company's No. 2 executive gets 2 percent of this cash flow. Nabors Industries, based in Houston, expects the Bermuda move to significantly increase cash flow. Foley and five other compensation lawyers said that beginning in the year after the Bermuda move, the related payments to Isenberg and his deputy also should begin rising.

"What is more, Foley said, details of the Nabors stock option plan indicate that he will make an additional $100 million on the exercise of options if Nabors shares rise by $9.72."

He said that the company had said that lower taxes and higher cash flow should increase share prices but had not said by how much.

He added that Isenberg owned 1.1 million shares outright but said disclosure documents did not reveal how many of these were in retirement and charitable accounts, which would not be taxable and he said Isenberg declined to comment, and a company spokesman refused to comment about either executive's pay.

He said that Stanley Works, based in New Britain, Connecticut, Trani stood to pocket 58 cents of each dollar that his tool-making company would save in corporate income taxes in the first year after its proposed move to Bermuda.

He said that Trani had estimated that as a result of the tax savings alone, the company's stock price should rise 11.5 percent.

Corporate income taxes would fall by $30 million annually, while the value of his existing options would increase by $17.5 million if the stock rose as much as he expected.

He added: "In a presentation to Wall Street analysts, Trani estimated that 60 percent of Stanley shares were held in retirement and charitable accounts where no tax would be due. Investors holding Stanley shares in taxable accounts, however, would have losses during that first year."

Mr. Johnston claimed that Troni said the investors would have to pay $150 million in capital gains taxes on holdings worth $1.6 billion so that the deal can go through.

He said: "Even if their shares rise 11.5 percent, the investors will barely break even after taxes.

"At the time of the move, however, Trani, would owe less than $50,000 - less than he earns each week in salary and bonuses - on his 16,688 shares on which the gains are taxable. The rest of his holdings are in options and retirement accounts, which are not taxable in the move.

"Trani has campaigned hard for the Bermuda vote, personally calling pension fund trustees and having executives call Stanley employees at home."