In one of the largest executive paydays in recent years, Nabors Industries Ltd. is giving its chairman $100 million in cash in a severance-style deal, even though he isn't leaving the company.

Eugene M. Isenberg, 81 years old, had been chairman and chief executive of the oil-drilling company since 1987. Late Friday afternoon, Nabors said it was promoting his longtime lieutenant, 57-year-old Anthony G. Petrello, to CEO, but that Mr. Isenberg would keep his job as chairman.

The...