ERA Group (market cap $187 million), a commercial operator of helicopters with its head office in west Houston, announced the departure of CFO, Andrew Puhala, in a cost-cutting move. The company is negotiating with Mr Puhala on the terms of the separation. Mr Puhala joined the company in September 2015. Jennifer Whalen, currently the Chief Accounting Officer, has been appointed Acting CFO.
The fact that the company is negotiating the terms is surprising as the terms of severance are usually spelled out in great detail in the employment contract. According to the proxy, if Mr Puhala was terminated due to a change of control, he would receive two times base salary and target bonus. At 31 December 2016, that would have amounted to $1.2 million cash payment and $0.4 million in vested stock options. As the share price has nearly halved since the year-end, the options will be worth much less now. According to the proxy, without a change of control, Mr Puhala would receive a $21,000 cash payment and the stock options. No wonder he is negotiating!
Compare that to the CFO of the Bristow Group, the largest helicopter operator, also based in Houston. He gets three times base salary and target bonus if he is terminated after a change of control. If he is terminated without cause with no change of control, he gets one times base salary and bonus.