While officially headquartered in Zug, Switzerland for tax purposes, Transocean (NYSE: RIG), the world’s largest deepwater drilling contractor, runs the majority of it’s operations from Houston, Texas.
A surprise visit by CBS’ 60 Minutes to Transocean’s executive office in Zug revealed recently that nobody was actually in the office, save the admin person who opened the front door. In a discussion with CBS’s Leslie Stahl,Texas Congressmen Lloyd Doggett, author of the International Tax Competitiveness Act of 2011, discussed with the legitimacy of the international relocation of formerly US companies to tax havens such as Switzerland.
“A good example is one of my Texas companies that’s been in the news lately, Transocean,” Rep. Doggett told Stahl.
Transocean owned the drilling rig involved in the giant BP oil spill. They moved to Zug two years ago.
“I’m not sure they even moved that much. They have about 1,300 employees still in the Houston area. They have 12 or 13 in Switzerland,” Doggett told Stahl.
“And yet they claim that they’re headquartered over there,” Stahl remarked.
“They claim they’re Swiss. And they claim they’re Swiss for tax purposes. And by doing that, by renouncing their American citizenship, they’ve saved about $2 billion in taxes,” Doggett explained.
Stahl and “60 Minutes” decided to visit their operations in Zug.
A woman at the door told Stahl, “At the moment my boss is not here.”
She said her boss wasn’t there and we should call someone halfway around the world, in Houston.
“But this is the headquarters,” Stahl remarked.
“I know,” the woman said.
When asked if the CEO was there or is normally at the Zug office, the woman said “No.”
But that may be all be changing! 60 Minutes continues their report:
We found that faced with the mere threat of Congressman Doggett’s (proposed) legislation, Transocean and Weatherford both recently packed up their top brass and shipped them to Geneva.
We were told Transocean’s top ten executives live in the Geneva area, and work on the top two floors of a Geneva office building – everyone from the CEO to the chief financial officer, to the vice president of taxes.
They wouldn’t talk to us on camera, and neither would Weatherford. They also moved their CEO and CFO to Geneva. And so now we’re beginning to see a jobs exodus from the U.S. of top management.
It seems ridiculous that a global company such as Transocean would actually need to justify the location of their headquarters considering the outdated corporate tax structure found in the United States. At least Transocean’s executives actually live in Zug and have an office, the same can’t be said for many others. Besides Houston, Transocean has major offices in the UK, France, Singapore, Nigeria, Brazil, and many others.
Additionally, the fact the senior leadership at Transocean were not in the office the day 60 Minutes showed up, is probably an indication that they were out visiting their offices and busy managing their company. In this day and age with Skype, and iPads and the such, what do you need a central office for anyway?
You can view the entire 60-minutes episode HERE.