Former Halliburton CEO Dave Lesar has been appointed the new CEO at Centerpoint Energy. He replaces Scott Prochazka, who left in February. He has been a non-Executive director since May.
Centerpoint is an electric and gas utility that serves more than 7 million metered customers in Arkansas, Indiana, Louisiana, Minnesota, Mississippi, Ohio, Oklahoma and Texas.
Mr Lesar joined Halliburton in 1993 and was Chairman and CEO from 2000 to 2017. For the past year he has been serving as the interim CEO at Health Care Service Corporation, the largest private health insurer in the US.
In his new role, Mr Lesar will receive a base salary of $1.35 million (same base as his predecessor). He will also receive a sign-on equity award of $1 million that will vest over three years. The company will also facilitate the relocation of Mr Lesar from Dallas to Houston by buying his Dallas residence for $1.2 million. (The head office of Halliburton was in Dallas until it moved to Houston in 2002).
Centerpoint has been in some turmoil recently. Former CEO Prochazka left with a cash severance payment of $7.3 million. He was also received the vesting of stock awards ($4.7 million) and the continued vesting of performance share units (could be worth up to $7.9 million).
In April, Xia Liu, the CFO, bolted after less than a year in the role, for a similar role at WEC Energy. Kristie Colvin, the Chief Accounting Officer, was appointed the interim CFO, pending the appointment of a new CEO.
In February, the company announced the sale of its Infrastructure Services and Energy Services divisions, in two separate transactions, for a combined $1.3 billion. The divisions made up about a third of Centerpoint’s total revenues, but weren’t very profitable. The company took a loss on sale of $234 million, after taking into account goodwill impairment.
In May, Centerpoint also received new equity funding of $1.4 billion from a group of investors that includes activist investor, Elliott Management. Elliott first invested in Centerpoint in 2015.
Elliott appears to be following a similar playbook to its investment in NRG Energy in 2017. NRG has its head office in New Jersey and its operations in Houston. It took over the retail operations of Houston’s Reliant Energy in 2009. It then overstretched itself after a series of acquisitions. Elliott’s pressure forced it into cost cutting and asset sales. I wouldn’t be surprised if Centerpoint is taken over within the next couple of years.