Category Archives: Construction

CFO promoted to CEO at ENGlobal Corporation

Mark Hess has been appointed as the new CEO at ENGlobal Corporation. The company is an Engineering and Construction business with its head office in north Houston. It has a market capitalization of $142 million.



Mr. Hess replaces Bill Coskey, who is stepping down as CEO, effective March 12. Mr. Coskey co-founded the company in 1985 and has been the CEO on-and-off since that time. He will continue as the Chairman of the Board.  The last person, other than Mr Coskey, to be in the CEO role, held it for just over two years between May 2010 and July 2012.

Mr. Hess joined the company in July 2011 as its Corporate Controller and was promoted to the CFO position in September 2012.

Replacing Mr. Hess as CFO is Darren Spriggs, the current Corporate Controller. He joined the company in June 2019. Prior to that, he served as the Director of Accounting for ABM Industries.

Roger Westerlind, the President of the company’s US subsidiary since December 2000, was also promoted to Company President.

No new compensation details were disclosed.

SEC filing – ENGlobal CEO

CEO steps down at Electrical Contractor

Gary Matthews has resigned as the CEO of IES Holdings, Inc. He was in the role for 18 months. He has also resigned from the Board of Directors. Jeff Gendell, Chairman of the Board, and effectively the majority shareholder, has been appointed interim CEO.



IES has its head office in the Galleria area. It provides electrical contracting and other infrastructure services to a variety of end markets. It has approximately 5,400 employees.

The company is doing reasonably well currently. For its most recent quarter, it had revenues of $291 million and an operating profit of $9.2 million. It had record backlog and most importantly, a net cash balance of $15 million.

Resigned or pushed out?

It is not clear whether Mr Matthews resigned or was pushed out. The company issued a press release quoting Mr Gendell as saying ‘As we planned for the future, Gary determined that this was the appropriate time for a leadership transition’.  Mr Matthews left the company on July 31 and the company appointed an interim CEO, so it’s not a planned leadership transition! I guess Mr Matthews fell out with the Chairman.

Severance

The company didn’t state whether Mr Matthews would get a severance or what would happen to his outstanding stock awards. In fact the most recent proxy statement didn’t include a table listing potential payments in the event of a departure of an executive. Previous proxy statements filed by IES have.

The previous CEO, Robert Lewey, who stepped down in March 2019,  got a cash severance payment of $875,000 that comprised of one years salary ($523,000) and a pro-rated bonus for the year.

Mr Matthews, who joined the company from Morgan Stanley Capital Partners, had a base salary of $650,000. As of September 2019, he had about $1.6 million in equity that had not vested.

SEC filing — IES CEO transition

 

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