On Monday, Weatherford announced they hired Halliburton CFO, Mark McCollum, as its new President and CEO, effective in late April.
On Friday Weatherford announced the terms of his hiring in an 8-K filing. Mr McCollum gets:
- base salary of $1 million
- cash bonuses that could be between 60% and 180% of base
- long-term equity incentive award of $6 million, vesting in equal installments over 3 years
- restricted shares worth $3 million, vesting over 3 years (25%, 25%, 50%)
- If Mr McCollum is fired other than for cause, he gets 2 x base salary and the restricted shares will vest immediately
- If Weatherford gets taken over, he will receive a lump sum being 3 x the highest salary he received in the preceding 3 years and the annual cash bonus average for those 3 years.
One analyst has speculated that the hiring of Mr McCollum increases the chances of Weatherford being taken over by Halliburton at some point. The particular clauses in Mr MCollum’s employment contract certainly give the impression that a takeover of Weatherford is a serious possibility.
Mr McCollum replaces Krishna Shivram, who was appointed interim Chief Executive Officer in November 2016. Mr Shivram was the CFO before that. He was being paid $750,000 as CFO and an additional $400,000 a quarter for his interim CEO duties. Mr Shivram has left Weatherford with immediate effect, meaning he is entitled to a cash severance of $4.5 million and restricted stock worth $2.4 million.