Diamond Offshore COO Ron Woll and CFO Scott Kornblau have resigned, taking advantage of ‘walkaway severance rights’ put in place following the company’s exit from bankruptcy in April 2021.
The offshore driller has its head office in west Houston and owns four drillships and eight semisubmersibles. It exited Chapter 11 bankruptcy in April 2021, having converted $2 billion debt into equity. For 2020, it had revenues of $733 million and its shares currently trade over-the-counter.
In May, the company appointed Bernie Woolford as its new CEO and in August, the company put itself up-for-sale.
Dominic Savarino has been promoted to be CFO. He is currently Chief Accounting Officer and Tax Officer. Mr. Savarino joined the company in 2017, the same year that Mr. Kornblau became CFO (initially in an interim capacity). He will receive an increase in base salary from $400,000 to $440,000. Mr. Woll won’t be replaced and his duties will be assumed by other senior executives.
The severance plan that was put in place in April allowed senior executives to resign voluntarily by September 20, 2021 and claim severance benefits because the bankruptcy was deemed a change-in-control.
Mr. Woll will receive severance of one year’s salary ($515,630) and 2021 target bonus (70% of salary or $360,941). Mr. Kornblau will also get one year’s salary ($435,000) and 2021 target bonus (50% of salary or $217,500).
For each of 2018, 2019 and 2020 Mr. Woll received a $750,000 cash retention bonus. In addition he also received cash bonuses in 2020 of $1.4 million as the company was unable to grant long-term equity awards because of the bankruptcy.
Likewise, Mr. Kornblau received cash bonuses in 2020 of $0.6 million.
As part of the emergence from bankruptcy, Marc Edwards, the previous CEO, left with a lump-sum cash severance of $6 million. He had also received $1.5 million retention bonus in each of 2018 and 2019. In 2020, he also received cash bonuses of $5.8 million.
For the two plus months ended 30 June, post-bankruptcy, the company had a net cash outflow from operations of $66 million. For a company not generating cash, it has spent a lot of money on cash bonuses and severances for senior executives.