Category Archives: Utilities

Crown Castle CFO changes his mind and will stay

Dan Schlanger, CFO of Crown Castle, has changed his mind and will now stay with the company. Back in October, he announced he would be leaving the company at the end of March.

But that was before CEO Jay Brown resigned in December, 10 days after activist investor, Elliott Management, called for changes at the company. Tony Melone, a Board member, replaced Mr. Brown, as interim CEO. Subsequently, the company announced a strategic review of its underperforming fiber business.

To help persuade Mr. Schlanger to stay at the company, the Board has granted him 21,085 restricted stock units that will vest in two tranches by the end of this year. At today’s stock price, those units are worth almost $2.3 million. Presumably by the end of 2024, there will be a new CEO in place and there will be actions taken for the Fiber business.

The company also announced that Chris Levendos will revert back to being the COO of the Fiber business. In addition, Mike Kavanagh, the Chief Commercial Officer, was promoted to be COO for Towers.

The day before Elliott took its stake, Mr. Levendos was promoted from being the COO of Fiber to being the COO of the overall company.

Laura Nickel, Executive VP of Business Support, also appears to be out at the company, although this was not mentioned in the press release. She is no longer listed as part of the Executive Management team that Crown Castle included as part of its earnings release.

SEC filing – 8-K – Crown Castle CFO to stay



Via Renewables to be taken private by Chairman

Via Renewables, an independent retail energy services company is to be taken private by Chairman and CEO Keith Maxwell for $11 per share. The price values Via at $70 million and is a 20% premium to the 30 day average price.

The company, which has its head office in west Houston, operates in 20 states and has approximately 337,000 residential customers. Mr. Maxwell founded the company, then known as Spark Energy, in 1999 and took it public in 2014.

Last year was a rough one for the company as volatility in natural gas prices impacted its profitability in 2022 which caused the dividend to be suspended in April 2023. Prior to the recent run up, the stock price was down about 75% from its peak in early 2023.

Mr. Maxwell directly or indirectly owns 66% of the common stock, so the deal has a strong chance of going through. The added twist is that a majority of the holders of the stock, not owned by Mr. Maxwell and the directors, also have to approve the deal.

The deal was negotiated on behalf of the company by a Special Committee of its Board of Directors with the assistance of independent financial and legal advisors. According to the company, the Special Committee is comprised by ‘entirely disinterested and independent directors’.

While that is technically true, two of the three independent directors have historical ties to Mr. Maxwell, who was previously the Chairman and CEO of Marlin Midstream. Amanda Bush is a former CFO at both Via and Marlin, while Nick Evans is a former director of Marlin.

The agreement provides for a ‘go-shop’ period of 30 days where the Special Committee will be permitted to seek competing offers from third parties.

The transaction is expected to close in the second quarter of 2024.

SEC filing – 8-K – Via Renewables

Crown Castle CEO out following letter from activist investor

Jay Brown is out as CEO of Crown Castle (CCI) after 7½ years in the role and 24 years at the company.  His departure will be effective January 16, 2024. Anthony Melone, a member of the Board of Directors has been appointed interim CEO, while the company conducts a search.

CCI owns and operates 40,000 large cell towers, 120,000 small cells and 85,000 miles of fiber. The company has revenues of around $7 billion, 90% of which comes from the rental of its infrastructure.

Mr. Brown’s ouster comes 10 days after activist investor, Elliott Management called for changes at the company. Following feedback from investors, analysts and current and former employees, Elliott sent another letter to the Board just this morning. In it, they said;

‘Jay Brown’s severe underperformance as a CEO has made the prospect of his departure his greatest moment of outperformance.’

The main criticism from Elliott concerns the lack of return on the amount of money Crown Castle has spent on its fiber business. Elliott are right on this. If you look at the last annual report, the Towers segment had an operating profit of $3.5 billion on assets of $22.2 billion. The Fiber division had an operating profit of $1.1 billion on assets of $16 billion. Now that Mr. Brown is out, expect the company to perform a strategic review of the Fiber business.

Today’s letter also noted that one day after the initial letter sent to the Board, the company announced that the COO of the underperforming Fiber business would be made COO of the Tower business as well.

Long-time CFO, Dan Schlanger, announced in October that he will leave the company in March 2024. [Update 01-24-24 Mr. Schlanger is staying with the company].

Severance Package

Mr. Brown will receive a severance of 1x base salary ($1.06 million), plus target bonus (175% of base), plus actual bonus for 2023 (which won’t have been paid by the time he leaves in  January), plus prorated target bonus for 2024 (approx $80k). Restricted stock will also vest. According to the latest proxy statement, the total severance would have been valued at $10.2 million at December 31, 2022.


NRG Energy

This is the second recent success that Elliott has in ousting a Houston-area CEO.  On November, 20, Mauricio Gutierrez, CEO of NRG Energy, announced his departure from the company. Elliott first took a stake in NRG in 2017 and forced the company to refocus with some success. It exited the investment in late 2017 with a return of over 100%. Mr. Gutierrez incurred the wrath of Elliott when it bought Vivint, a home security business in March 2023 for $2.6 billion. Elliott disclosed a 13% stake in NRG in May.

Phillips 66

Elliott has also recently taken aim at a third Houston company, Phillips 66. It argues that the refinery margins are considerably lower than those of its peers.

SEC filing – Crown Castle CEO departure


Crown Castle CFO to depart

Dan Schlanger, CFO of Crown Castle (CCI), will leave the company in March 2024. The company is conducting a search that will include both internal and external candidates.

[UPDATE 01-24-24 Mr. Schlanger has decided to stay with the company after the recent departure of CEO Jay Brown].

CCI owns and operates 40,000 large cell towers, 120,000 small cells and 85,000 miles of fiber. The company has revenues of around $7 billion, 90% of which comes from the rental of its infrastructure.

Back in July, the company announced it would cut headcount by 15% and close a number of regional offices. CCI has been suffering a downtown as the mobile operators complete their 5G rollout. The T-Mobile takeover of Sprint badly affected the company. This will reduce tower revenues by $200 million a year from 2025.

Mr. Schlanger was appointed the CFO in June 2016. Prior to joining CCI, he spent 9 years at Exterran, another Houston company. He has also worked for Merrill Lynch as an investment banker.

He will receive severance in accordance with the agreement he signed when he joined the company. That amounts to $1.4 million (1x base salary, $620k, 1x annual bonus, $620k plus pro-rata bonus for 2024, $155k).

In addition, any restricted stock units would also vest. According to the most recent proxy statement, these were valued at $1.6 million. That was assuming a stock price of $135 (the price at December 31, 2022). The current stock price of CCI is $90.

Mr. Schlanger is the second senior executive to depart in recent months. Back in August, Cathy Piche, Chief Operating Officer – Towers, resigned to take a position at Phoenix Tower International, a smaller competitor to CCI.

SEC filing – CCI CFO departure


Orbital Infrastructure files for bankruptcy

Orbital Infrastructure Group logo

Orbital Infrastructure Group has filed for Chapter 11 bankruptcy. The company, based in the Galleria, has been struggling for a while. It has negative equity of $155 million and $306 million of debt obligations.

The company was formed in Colorado in 1998 to develop thermal management solutions. In 2008, it moved its head office to Oregon with the acquisition of a business that manufactured power supplies, transformers and industrial controls. It began trading on the NASDAQ in 2012. In 2022, OIG had revenues of over $300 million but has made operating losses for the past 10 years.

OIG moved its head office to Houston in 2020, following the appointment of Jim O’Neill as its CEO. He spent 17 years at Houston-based Quanta Services, including five years as CEO before leaving in March 2016. After his appointment, the company pivoted to energy infrastructure services.

Losses galore

At the time of his appointment in 2019, the company had no debt! However, there have been a series of disastrous missteps.

  • The company bought Reach Construction, a start-up utility-scale solar construction contractor in April 2020 for $11 million. The business was loss-making and lost $4 million in its first nine months after acquisition. The company then made the decision to scale up the business to take on larger projects.
  • In October 2021, the company formed a joint venture to complete two fixed-price solar energy projects in Alabama and Arkansas. For 2022, Orbital’s share of the losses were $54 million! In April 2023, the company agreed to pay its JV partner an additional $34 million so that the partner could finish the projects. The $34 million has not yet been paid and is part of the $306 million debt obligations.
  • In November 2021, the company bought Front Line Power Construction for $219 million, mostly paid in debt ($105 million) and loan notes ($86 million). The assets acquired included $70 million of goodwill and $108 million of intangible assets.
  • While the performance of Front Line has been reasonably good, the solar panel project losses triggered a large decline in Orbital’s stock price in 2022. In turn, that triggered a goodwill impairment that caused all the Front Line goodwill to be written off.
  • The company made four other acquisitions in 2021 and 2022. While they performed okay, they undoubtedly caused management distractions. The stock price reduction also caused another $26 million goodwill impairment.
  • The legacy gas systems business in the UK was sold in 2021, resulting in an impairment of $9 million.
  • An unnamed customer, one of OIG’s largest and most profitable, started its purchases from OIG in 2023 as concerns over the financial stability of the company mounted.

Front Line Power and Gibson Telecoms (one of the 2021 acquisitions) are in the process of being sold and are not part of the bankruptcy proceedings.

Well-paid executives

For a relatively small company, OIG has some highly paid executives.

  • Mr. O’Neil has a base salary of $800,000.
  • William Clough, Executive Chairman and former CEO, is paid $850,000
  • CFO Nick Grindstaff gets $650,000. Mr. Grindstaff also gets a yearly guaranteed bonus of 100% of base salary.

SEC filing – bankruptcy


Crown Castle to cut headcount by 15% and close offices

Crown Castle, based near the Galleria, has announced it will cut its headcount by 15% (approx 750 jobs). It will also discontinue installation services as a product offering within its Tower segment. The company will incur one-time restructuring charges of approximately $70 million (mostly severance).

In addition, the company said it would consolidate office space and incur a charge of $50 million. That’s for accruing remaining lease obligations and writing off leasehold improvements. The company didn’t publicly disclose which offices were affected but an anonymous post on ‘’ stated that 13 regional offices were closing. That post also said that, if employees in those offices didn’t work for that specific region, they would have to move to Houston or leave the company.

Crown Castle has said that the mobile phone operators have slowed down tower construction activity by 50% in the second quarter as they complete the major part of their 5G investment roll-out.

The company owns and operates 40,000 large cell towers, 120,000 small cells and 85,000 miles of fiber. The company has revenues of around $7 billion, 90% of which comes from the rental of its infrastructure.

The other 10% of revenue comes from Tower Services with about 55% of that from Site preparation and 45% from installation services. It is the latter that is being discontinued. Unlike the rental business that has high margins under long-term contracts, services have lower margins (~30%) and volumes are more volatile.

Elliott Management

Back in 2020, activist investor Elliott Management took aim at Crown Castle, believing that it had under-performed because it invested heavily in Fiber, which had a return on capital of 3%. It also said the board was too insular. At the time, 8 of the 11 non-executive directors had served for at least 13 years and included two former CEOs.

Elliott launched its campaign with great fanfare in June 2020 and Crown Castle quickly responded by replacing three of its non-execs. However, the company didn’t make any other major changes and Elliott appeared to quietly drop its campaign soon thereafter.

At that time, Crown Castle’s market capitalization was $71 billion. It is currently $47 billion.  The company’s largest customer is T-Mobile. Its long-term growth prospects took a hit following the merger of T-Mobile and Sprint as the combined customer required less tower rentals.

That leads me to wonder if Elliott will come knocking on the door again, like they did recently with another Houston company, NRG. The Fiber business still earns a single digit return that is below the company’s cost of capital.

For good measure, today the company also announced two new non-exec directors. That will mean 5 out of 12 will have been appointed in the past three years.

SEC filing – 8-K – Restructuring


NRG replaces CFO as it faces pressure from activist investor again

NRG Energy, which has its head office in downtown Houston, has announced that Bruce Chung will replace Alberto Fornaro as its CFO. Mr. Chung is currently the VP of Strategy and M&A and is based in New York. Mr. Fornaro will stay on in an advisory capacity until September 1, 2023.

NRG is an integrated power company that has most of its retail customers in Texas. For a long time it had dual headquarters in New Jersey and Houston. This arose after NRG bought the retail electricity business of Houston-based Reliant Energy in 2009.  The company also bought Houston-based Direct Energy from BG in January 2021 for $3.7 billion. It currently has a market capitalization of $7.5 billion.

In December 2022, NRG agreed to buy Vivint, a smart home platform company, for $2.8 billion in cash. Investors didn’t understand the strategy, the stock plunged 15% and hasn’t recovered.

That attracted the attention of activist investor, Elliott Investment Management, who took a 13% stake and sent a letter to the directors last month, demanding that they make changes. This isn’t the first time that Elliott has taken an interest in NRG. In 2017,  Elliott took a stake in NRG after a similar diversification strategy had left the company with high debt. Elliott worked with NRG to refocus the company.

Mr. Fornaro joined as CFO exactly two years ago. Prior to joining NRG he was CFO at Coupang, a Korean e-commerce company. He joined in February 2020 and left by December for reasons unknown. Coupang went on to complete its IPO in March 2021 with a $60 billion valuation.

Mr. Fornaro had a base salary of $737,760 and a received a $1 million sign-on bonus (half paid when he joined, half in June 2022).

The current filing doesn’t explicitly state his severance but according to the recent proxy statement, he will receive 18 months of severance ($1.1 million).

Mr Chung has been with the company since 2008, except for a 7 month stint in 2016 with an investment firm. He has worked in both Houston and New Jersey. He will receive a base salary of $700,000.

SEC filing – NRG Energy Chung CFO

Centerpoint appoints new CFO

Centerpoint Energy (market cap $18 billion) has appointed Chris Foster as its new CFO, effective May 5. He replaces Jason Wells, who was promoted to COO in January.

Mr. Foster joins from PG&E, a publicly-traded electric utility company (market cap $32 billion) that serves central and northern California, where he had been CFO since March 2021. He joined PG&E back in 2011. Mr. Wells was the CFO at PG&E before Mr. Foster.

Mr. Foster will receive a base salary of $700,000 and an equity award worth $3.9 million which will vest on his first and second anniversaries of the grant date. He will also receive relocation assistance to move to Houston.

To replace Mr. Foster, PG&E appointed Carolyn Burke as CFO. She has Houston connections, having been the CFO at Chevron Phillips Chemical Company from February 2019 to September 2022. Chevron Phillips is a jointly owned by Chevron and Phillips 66 and has its head office in The Woodlands.  She has been working as consultant to PG&E since January.

For many years, Ms. Burke worked at Dynergy and also had a spell at NRG Energy. She will have a base salary of $725,000, a signing bonus of $400,000 and $400,000 in restricted stock units.

SEC filing – Centerpoint CFO

Quanta Services promotes CFO to operations role

Quanta Services has promoted CFO Derrick Jensen to Executive VP, Business Operations. The company is the third Houston-area public company this week to promote its CFO, following Halliburton and US Well Services.

Jayshree Desai moves from Chief Corporate Development Officer to CFO. Both changes are effective July, 2022.

Quanta designs, installs, repairs and maintains energy and communications infrastructure. It has revenues of $13 billion and a market capitalization of $17 billion.

Mr. Jansen has been with Quanta since its inception in 1997 and has been the CFO for the last 10 years.

Ms. Desai joined Quanta in January 2020. She was previously the founder of a renewable energy company focused on utility-scale wind, solar and storage development and COO of a electric transmission development company. Prior to that, she was CFO of EDP Renewables North America.

No new compensation arrangements for either executive were disclosed.

SEC filing – Quanta CFO change


NRG moves corporate office to Houston as it names new CFO

NRG Energy has announced that Houston will serve as the company’s sole corporate headquarters. Previously, the company had dual headquarters in Houston (Operations) and Princeton, New Jersey (Corporate).


NRG is an integrated power company that has most of its retail customers in Texas. The dual headquarters arose after NRG bought the retail electricity business of Houston-based Reliant Energy in 2009. It currently has a market capitalization of $8.6 billion.

In January of this year, NRG bought Houston-based Direct Energy from Centrica for $3.6 billion in cash. The company forecast it would achieve $300 million in synergies by 2023 and the corporate office rationalization is part of that plan.

New CFO appointed

NRG also appointed Alberto Fornaro as its new CFO. He replaces Kirkland Andrews who resigned in February to become CFO at Evergy, based in Kansas City.

Mr. Fornaro has a diverse and interesting background. An Italian citizen, he joined Coupang, a Korean e-commerce company in February 2020. However, by December, he had exited that role for reasons unknown. Coupang went on to complete its IPO in March 2021 with a $60 billion valuation (the largest in the US so far this year).

Prior to Coupang, he was CFO for nine years at International Gaming Technology and the CFO of Doosan Infracore Construction Equipment, which is based in Korea. His early career was spent at Fiat and CNH Global, an agricultural equipment business whose majority shareholder is Fiat.

Mr. Fornaro will receive a base salary of $725,000 and a $1 million sign-on bonus (half now, half in June 2022).

Impact of Texas winter storm

NRG also disclosed that the financial impact of Winter Storm URI was $967 million. The main components of this were;

  • $393 million from a bilateral hedge in the Direct Energy hedge book with a counterparty that did not perform.
  • $95 million due to ERCOT default allocations
  • $395 million due to ERCOT’s management of the grid (remember later that week, ERCOT kept the market clearing price at the cap, even though there was 10 gigawatts in reserve)
  • customer bad debts of $109 million

In case you were wondering who the winners were from the winter storm, Dallas-based pipeline company Energy Transfer announced a $2.4 billion gain from the event, whilst Kinder Morgan booked a $1 billion gain.

SEC filing – NRG CFO