Long-time Schlumberger CFO steps down

Long-time Schlumberger CFO Simon Ayat has announced he is stepping down, effective January 22, 2020. He will be replaced by Stephane Biguet, who is currently the VP of Finance for the company.

Mr Ayat joined Schlumberger in 1982 and has been its CFO for the past twelve years. He has a base salary of $1 million, the largest base salary of Houston-area CFOs. After he steps down as CFO he will serve as Senior Strategic Adviser to the company for a period of two years. Mr Ayat will continue to receive his salary and his stock options will continue to vest. He will also be awarded more performance stock options in January 2020.

His exit contract mirrors that given to former CEO Paal Kibsgaard who left the CEO position in July 2019. There had been rumors in the press circulating since last year that Mr Ayat intended to step down. My guess is that he agreed to stay on, pending the CEO transition to Olivier Le Peuch.

Mr Biguet joined the company in 1995 and has served in various financial roles at the company. He will receive a base salary of $770,000

 

SEC filing – Schlumberger – Ayat

 

 

CFO of Frac sand company resigns

Laura Fulton, CFO of Hi-Crush, has resigned, effective 31 December 2019, to pursue another career opportunity.

Hi-Crush has its head office in the Galleria and is a provider of proppant and logistics solutions to the oil and gas industry in North America.



The company went public in 2012 and rode the boom and bust in the fracking industry. At its peak it had a market capitalization of over $1.3 billion. The company currently has a share price of $0.70 and a market capitalization of $69 million.

Ms Fulton has been the CFO since April 2012, joining just prior to the Initial Public Offering. She is also a non-executive director at Targa Resources. Before Hi-Crush she worked at AEI, an energy infrastructure company, and LyondellBasell (for 12 years).

Phil McCormick, VP of Finance, has been appointed as the new CFO. He joined the company in August 2018. Prior to that, he held several positions over nine years at KBR, including Treasurer. He also worked at LyondellBasell for 11 years. Mr McCormick started out at Coopers and Lybrand.

Mr McCormick will receive a base salary of $300,000. Instead of an annual bonus for 2020, he will also receive a retention bonus of $250,000 that will be paid in the summer of 2021.

SEC filing – Hi-Crush

Houston woman charged with embezzlement

A Houston woman, Beverly Davis, has been charged with embezzlement and theft of assets from her employer, a local labor union.

Ms Davis was an employee of the Communications Workers of America Local 6222. The local represents AT&T workers and is based in the Greenspoint area of Houston. The charges allege that from 2010 to 2017 she used union funds to pay for personal expenses and other authorized charges.



According to the Information sheet filed in the Southern District of Texas, the amount involved is $85,537. The charge sheet doesn’t give any more details than what is listed in the press release. There are no details of the personal expenses or how she was able to carry out the alleged embezzlement.

If convicted, Davis faces up to five years in federal prison and a possible $10,000 maximum fine.

https://www.justice.gov/usao-sdtx/pr/local-woman-charged-embezzling-thousands-her-job

Houston hospitality company gets delisting notice

Photo by Jason Woodhead

Civeo Corporation has been notified by the New York Stock Exchange that it is non-compliant with its listing standards. The company’s share price has fallen below $1 for the past 30 days.

Civeo has its head office in downtown Houston. The company provides workforce accommodation services to the oil and gas and mining industries. It has operations in Canada (66% of revenues), Australia (24%) and the US (10%). The company has a market capitalization of $145 million.



The company’s problems stem from its spin off from Oil States International in May 2014 . The spin-out saddled it with $775 million in debt. Given the collapse in oil prices later that year it was perfect timing by Oil States! Total debt is currently $391 million with a debt to adjusted EBITDA just over 4.0.

Just last month, the company promoted Carolyn Stone to be its CFO. She replaced Frank Steininger. He is staying on at the company as Executive VP of Strategic Initiatives until he retires in March 2020.

The company has notified the NYSE that it intends to cure the deficiency and restore its compliance with the listing standards. In general, a company has six months to regain compliance.

Back in February 2016, the company received a delisting notice because the share price had been below $1. Within a few weeks, shares climbed back above $1 and the company regained compliance.

SEC filing – Civeo listing non-compliance

McDermott appoints new Chief Accounting Officer

McDermott International has appointed Dale Suderman as its new Chief Accounting Officer. He replaces Chris Krummel who was promoted to the CFO position earlier this month.



Mr Suderman joined McDermott in July 2016 as its Senior Director of Financial Planning and Analysis. Prior to joining the company, he was at Direct Energy from 2009 onwards. Unusually Mr Suderman has worked for PricewaterhouseCoopers, Arthur Andersen and Ernst & Young.

Mr Suderman will receive a base salary of $285,000. He will also receive a retention bonus equal to 75% of his annual salary. This is on the same terms as the other retention bonuses granted in October 2019 (a third now, a third when the Tranche B is funded – likely Dec 2019, and the rest when Tranche C is funded – likely early Q1 2020).

[UPDATE 12-2-19 Tranche B has now been funded]

McDermott keeps making headlines for all the wrong reasons. In early November there were reports that construction on its new headquarter building stopped after the company fell behind $14.2 million on payments to its general contractor.

Last week the company defended its participation in a huge petrochemical project in Russia. It stated it was in full compliance with the law and did not breach international sanctions against Moscow. Shell pulled out of the same project in April. According to Reuters, one factor behind Shell’s decision was that Gazprom had suddenly brought in another partner with links to businessman Arkady Rotenberg who is on a U.S. sanctions blacklist.

McDermott’s share price is currently $0.80 cents (market cap $145 million).

SEC filing – McDermott CAO appointment

Houston Engineering Company pays $1.6 million to settle campaign finance violations

Dannenbaum Engineering, a major civil engineering contractor, has agreed to pay a $1.6 million fine for its involvement in campaign finance violations.



The company built parts of the Sam Houston Tollway, the Hardy Toll Road and taxiways at both Houston airports.

CEO recently stepped down

The former CEO of Dannenbaum, 80-year-old James Dannenbaum, has been separately charged for his role in the scheme. Mr Dannenbaum is a former Regent of the University of Texas (appointed by Rick Perry). He also serves on the boards of MD Anderson Cancer Center and until recently, the Greater Houston Partnership.

Also heavily involved was Louis H Jones, the Director of Dannenbaum’s South Texas region. Mr Jones lived in McAllen.  He died by suicide in October 2018.

The Scheme

The company admitted to making $323,300 in illegal contributions between 2015 and 2017

The scheme involved employees of the company making campaign contributions in their own name and then, secretly, being reimbursed by the company. The individuals and the campaigns involved are not named in the Information document filed in court in early November. However, searches of the database of the Federal Election Commission reveal the true recipients.

  • Kevin Brady (R) – House Representative for the 8th District of Texas (which covers the Woodlands and Huntsville). In February 2017, Brady’s campaign committee received a total of $10,000 from Jones and three employees (one based in Houston, the other two in South Texas).
  • John Cornyn (R) – Senior Senator for Texas. Cornyn’s campaign committee also received  total of $10,000 from the same individuals in February 2017.
  • Filemon Vela (D) – House Representative for the 34th District of Texas (which covers the Gulf Coast between Brownsville and Corpus Christi). Jones donated $2,500 to Vela’s campaign.

The company reimbursed Jones for the total amounts paid. In the company books, these were disguised as marketing advances. In turn, Jones issued personal checks to the three employees involved.

It’s interesting that the amounts involved quickly snowballed from the $22,500 disclosed in the Information document filed in early November to the $323,300 disclosed in the settlement agreement. The company has a new CEO, Michael Maksoud, who has vowed to restructure its board and stop all politically-related payments to its employees.

Perry and McCarthy big beneficiaries

A breakdown of the $323,300 has not been made public. While politicians from both parties appeared to receive donations, the two biggest recipients according to the FEC records were Rick Perry’s Super PAC (at least $90,000) and Kevin McCarthy’s committees (at least $38,500).

In the same period James Dannenbaum made almost $0.5 million in legal contributions to various candidates. They were mostly Republican including the Cruz, Perry and Rubio Presidential campaigns. However he also donated to Houston Democrats such as Al Green and Sheila Jackson Lee.

https://www.justice.gov/usao-sdtx/pr/houston-engineering-corporation-enters-corporate-resolution-and-agrees-pay-16-million

 

 

Workforce accommodation specialist appoints new CFO

Carolyn Stone has been appointed CFO of Civeo Corporation. She replaces Frank Steininger. He is staying on at the company as Executive VP of Strategic Initiatives until he retires in March 2020.



Civeo has its head office in downtown Houston. The company provides workforce accommodation services to the oil and gas and mining industries. It has operations in the US, Canada and Australia. The company has a market capitalization of $151 million, though its current share price is only 81 cents.

Ms Stone joined the company in May 2014 as its Controller and Corporate Secretary. Prior to joining Civeo, she was the CFO at Synagro. At that time Synagro was a Houston-based biosolids company that went in Chapter 11 in April 2013. Before that, Ms Stone spent many years working for Dynergy. She started her career at PricewaterhouseCoopers.

Compensation for Ms Stone was not disclosed.

Ms Stone’s appointment means that 10% of all Houston-area public companies have female CFOs. You can see the list of all the companies here.

https://www.businesswire.com/news/home/20191118005882/en/Civeo-Appoints-Carolyn-Stone-Chief-Financial-Officer

 

Marine vessel fabricator appoints new CEO

Gulf Island Fabrication

Richard Heo has been appointed the new CEO of Gulf Island Fabricators. He replaces Kirk Meche who stepped down in October.



The company is a fabricator of marine vessels with facilities in Houma and Lake Charles, Louisiana. It has its head office in west Houston and a market capitalization of $68 million.

The company has struggled in recent years as the market for offshore vessels has shrunk. The company is trying to diversify into onshore fabrication and other areas where project management skills are needed (such as offshore wind).

Prior to joining, Mr Heo was the Senior VP of North, Central and South America for McDermott International. He had previously served as VP of Fabrication Services for CB&I.

Mr Heo will receive a base salary of $487,000. He also receive an initial grant of 100,000 restricted stock units that will vest over 3 years (current price $4.47).

SEC filing – HEO appointment

 

Weatherford appoints new CFO

Christoph Bausch, CFO of Weatherford International, has resigned effectively immediately. He will be replaced by Christian Garcia, who will begin his new role on January 6, 2020.

Weatherford entered bankruptcy proceedings in July 2019. It is nearing an exit from Chapter 11 that will reduce debt by $6 billion. The bondholders will own 94% of the restructured company. 5% will be set aside for a management incentive plan. Existing shareholders will own the other 1%.



Mr Bausch has been CFO since April 2017. He will receive a severance package of $650,000 (one year’s salary) and a pro-rated bonus for 2019 (not sure how much this will be). Note also that he received a cash retention bonus of $1.3 million in April 2019.

Mr Garcia has been the CFO at Michigan-based Visteon Corporation for the past three years. However, prior to that, he spent ten years at Halliburton including 18 months as interim CFO. In fact, he replaced Mark McCollum, the current CEO of Weatherford, as CFO during Halliburton’s ill-fated proposed merger with Baker Hughes (2015-2016).  At the time of the proposed merger, Mr McCollum was appointed Chief Integration Officer. After the merger fell apart, Mr MCollum was reappointed CFO at Halliburton before becoming the CEO at Weatherford in March 2017.

Mr Garcia will receive a base salary of $675,000 and a one-time sign-on bonus of $500,000. He will also receive a long-term equity award of $2,000,000 that will vest over three years. These will be granted once the company emerges from Chapter 11.

SEC filing – Weatherford CFO

 

Houston biotech company appoints new CFO

CNS Pharmaceuticals, which just went public last week, has officially appointed Christopher Downs as its new CFO.



Mr Downs joins from Innovative Aftermarket Systems LP, a privately held provider of finance and insurance solutions where he was VP of Finance and Treasurer. Prior to that he spent 7 years at InfuSystem Holdings Inc, a provider of infusion systems to oncologists in the US. He is a West Point graduate and has an MBA from Columbia Business School.

CNS doesn’t have any revenues yet and is developing anticancer drugs for the treatment of brain tumors. Based on preclinical data and positive results of the Phase I clinical studies conducted at MD Anderson Cancer Center, the company believes its lead drug candidate, Berubicin, could significantly help in the treatment of glioblastoma, a type of brain cancer that is considered incurable.

The company raised $8.5 million (net of fees) by selling 2.1 million shares at $4, at the low end of its range of $4-$5. Mr Downs agreed to join in September, conditional on the Initial Public Offering being completed.

Mr Downs will receive a base salary of $300,000. He was also granted a 10-year option to purchase 30,000 shares at an exercise price equal to the public offering price per share of the shares sold in the IPO. Mr Downs, who has lived in Houston previously, but currently lives in Utah, will also receive a one-time relocation bonus of $15,000.

Mr Downs replaces Matt Lourie who was the part-time fractional CFO prior to going public.

SEC filing – CNS Pharmaceuticals – CFO