Tag Archives: 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

 

Centerpoint appoints former Halliburton executive as its new CEO

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.

Compensation package

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).

Executive changes

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.

Activist Investor

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.

SEC Filing – Centerpoint appoints Lesar as CEO

 

 

 

Biopharma CEO leaves after 3 months

A big shake-up at Aravive results in CEO Rekha Hemrajani leaving the company, along with Chairman and former CEO Jay Shepard. Two other directors are also leaving the Board.



Investor and Pharma veteran Fredric Eshelman has bought $5 million of shares (just over 5%) in the company and installed himself as Non-Exec Chairman.

Aravive is a clinical stage biotechnology company, focusing on developing therapies for solid tumors and hematologic malignancies. It has its head office in downtown Houston. It went public in October 2018 via a reverse takeover.

Ms Hemrajani only joined the company in January 2020. She worked out of the company’s Palo Alto office. She came from Arcus Biosciences where she had been COO and CFO. Ms Hemrajani will receive a severance payment ($237,500) equivalent to six months salary as well as the accelerated vesting of 35,750 shares (worth about $250,000).

Dr Gail McIntrye has been promoted from Chief Scientific Officer to CEO. She has worked with the new chairman at two previous companies.

SEC filing – Aravive CEO

Houston companies reduce salaries for senior executives

In recent days, a few public companies in the Houston have announced salary reductions for senior executives as they battle with the economic downturn. The changes are temporary though most haven’t set a timetable for when they will be restored. A summary of the changes announced for the CEO and CFO officers is set out in the table below.

A shout-out to Cactus, an oilfield services company, who were the first to announce changes.

[UPDATE 4/3/2020 – Since publishing this article, other companies have implemented reductions including Stage Stores (25%), NCS Multistage (20%), Target Hospitality (20%), Flotek (10%) and Team (10%)].

A couple of other comments

Occidental : All Executives had their salaries capped at $250,000. Furthermore, it appears that Oxy cut the salaries of all US employees making over $76,000 by 30%. It appears those making less got cut by 20%. Legacy Anadarko employees appear to have only got cut 4.9% to avoid breaching contracts in last year’s disastrous merger. That’s really going to help mesh the company cultures!

Group 1 Automotive : 3,000 US employees are furloughed for a 30-day period, with an option for a second 30-day period. 2,800 UK employees are furloughed for an initial period of 21 days. That’s about 40% of their workforce.

SEC filing – Group 1 Automotive

https://www.thelayoff.com/occidental-petroleum

 

CompanyPositionNameOld salary $000New salary $000% reduction
CactusCEOScott Bender30015050%
CactusCFOStephen Tadlock33526820%
Group 1 AutomotiveCEOEarl Hesterberg1,15057550%
Group 1 AutomotiveCFOJohn Rickel63050420%
Luby'sCFOScott Gray34217150%
Nabors IndustriesCEOTony Petrello1,7501,40020%
Nabors IndustriesCFOWilliam Restrepo65052020%
Occidental PetroleumCEOVicki Hollub1,25025080%
Occidental PetroleumCFOCedric Burgher72525066%
Superior Energy ServicesCEODavid Dunlap85068020%
Superior Energy ServicesCFOWesty Ballard44037415%
US Physical TherapyCEOChris Reading80048040%
US Physical TherapyCFOLarry McAfee51033235%

CEO out at Houston retail energy company

Spark Energy stock price

Nathan Kroeker is out as the CEO of Spark Energy. He is replaced, on an interim basis, by founder and chairman, Keith Maxwell, who still owns approximately 66.5% of the stock.

The company was founded in 1999 and is headquartered in west Houston. It supplies energy to residential and commercial customers operating in 19 states.



It’s not clear what prompted the change. EBITDA rose in 2019 to $71 million and the company has net debt of only $66 million. Its share price is currently $6.20, down from $10 earlier in the year.

Mr Kroeker had been the CEO since April 2014. Prior to that. he was the CFO of Spark between 2010-2012. He had a base salary of $450,000. The SEC filing doesn’t mention any details of his severance package. However, the annual proxy for 2018, filed in April last year, stated that Mr Kroeker was entitled to severance of one year’s salary, payable in twelve monthly installments.

He will also get his 2019 earned bonus (the 2018 figure was $250,000) and a pro-rated 2020 target bonus. Mr Kroeker’s unvested stock awards will also vest. As the annual proxy statement for 2019 has not been filed, I can’t quantify their specific worth, but it is likely to be over $2 million.

Mr Maxwell will receive a salary of $1 for his interim CEO role, though he is paid $250,000 in fees for his non-Executive chairman position.

Spark appointed Jim Jones as its new CFO in June 2019. He replaced Rob Lane, who stepped down to become the CFO at Sunnova Energy, which went public in July.

SEC filing – Spark Energy CEO

Centerpoint Energy CEO steps down

Scott Prochazka, CEO of Centerpoint Energy, has resigned from his position with immediate effect.  John Somerhalder, a director of the company, has been appointed interim CEO while the Board conducts a search for a new CEO. The Board determined that ‘now is the right time for a new leader with a fresh strategic perspective.’



Centerpoint Energy has a market capitalization of $13.7 billion.  It has nearly $35 billion in assets and serves 7 million customers in 8 states.

Mr Prochazka has been with the company since 2001 and had been CEO since January 2014. He had a base salary of $1.323 million. According to the 2018 proxy statement, technically there are no formal severance payments due to Mr Prochazka, unless it is a change of control.

[UPDATE 03-09-20 The company has filed a separation agreement and it’s a whopper. Mr Prochazka will get a lump sum cash payment of $7,348,584. His 2016-2018 stock awards will also vest. It’s hard to tell, but they are probably worth about the same again]

When CFO Bill Rogers retired in March 2019, the Compensation Committee gave him a special lump-sum cash payment of $360,000 (about 60% of his base salary). He also had joined the company in 2001.

Xia Liu was appointed as the new CFO in April 2019.

SEC filing – Centerpoint CEO resigns

SEC Filing – Separation Agreement

Houston retailer appoints new CEO

Francesca’s Holdings has appointed Andrew Clarke as its new CEO, effective March 9, 2020. He replaces Michael Prendergast, who has been serving as interim CEO since February 2019.

Former CEO Michael Lawrence left to become the Chief Merchandising Officer at Academy Sports & Outdoors, based in Katy. However it was only in December that the company announced it had hired a retained search firm to find a new CEO.



Francesca has a market capitalization of $22 million and has its head office in west Houston. It operates approximately 700 boutiques in 47 states. Like many retailers, it has been struggling with tough market conditions.

Mr Clarke has plenty of retail experience and was previously the President at Loft and Chief Merchandising Officer at Justice. He will receive a base salary of $700,000 and a restricted stock grant of $500,000 that will vest over three years. As he is moving from New York, he will also receive a lump-sum payment of $200,000 to cover relocation costs.

Mr Prendergast is actually employed by consultants Alvarez & Marsal. The company had been paying A&M approximately $100,000 a month for the services of Mr Prendergast. With the appointment of Mr Clarke, the company has amended the agreement and will now be paying A&M $120,000 a month while Mr Prendergast is still the interim CEO. A&M may also receive incentive compensation of $500,000 subject to the achievement of certain targets.

In July 2019, CFO Kelly Dilts resigned to become the Senior VP Finance at Dollar General, based in Tennessee. Cindy Thomasee was promoted from Chief Accounting Officer to take her place.

SEC filing – Francesca CEO appointment

Sysco CEO leaves with $6 million cash severance

Sysco Corporation has replaced CEO of two years, Tom Bene with Kevin Hourican, who joins from CVS.

Sysco, a food distributor, is one of the largest companies headquartered in Houston. It has a market capitalization of $42 billion, revenues of $60 billion and 69,000 employees.



Tom Bene had been the CEO since January 2018 and Chair of the Board since November 2018. His promotion to the top job was announced in July 2017. Mr Bene had joined Sysco in 2013 as Chief Merchandising Officer before becoming COO in January 2016. Prior to that he spent 24 years at Pepsi-Cola.

Although the stock is near its all-time high, clearly matters are not going well inside the company. In announcing the switch, the board stated that the change will allow the company to ‘accelerate performance, fully capitalize on its scale advantages and drive meaningful operating improvements’.

Severance payment

Mr Bene had a base salary of $1.2 million and his target annual bonus was 150%. He will receive a severance of $6 million, in cash. This represents two times base and target bonus.  For the year ended 30 June 2019, Mr Bene received a cash bonus of just over $1.5 million, representing 85% of target.

Mr Bene will also get two years’ worth of health insurance premiums. Other than that, he didn’t get any additional payments. All his unvested stock has been forfeited. Like all officers of Sysco, Mr Bene didn’t have a severance or employment agreement that provided for guaranteed severance or other compensation upon termination.

New CEO compensation

Mr Hourican was the Executive VP of CVS Health and president of CVS Pharmacy. He will receive an annual base salary of $1.3 million. He will also receive a one-time sign-on bonus of $1.45 million to compensate him for the bonus foregone at CVS. Mr Hourican will also receive an annual equity award with a fair value equal to $8.5 million. 40% will vest over 3 years, the rest is performance-based.

New Chairman

Edward Shirley, currently Lead Independent Director of the Board, has been appointed Chair of the Board.

SEC filing – Sysco CEO change

 

Almost bankrupt Oilfield Services company gives CEO $2.5m severance

Key Energy Services has announced the departure of CEO Robert Saltiel and the appointment of CFO Marshall Dodson as the interim CEO.

Back in November, Key missed an interest payment on its $250 million term loan as it considered strategic alternatives. Its shares were delisted on November 27 at 27 cents per share, giving it a market capitalization of $2.64 million.



Mr Saltiel only joined Key in August 2018. He had a base salary of $800,000 and will receive a cash severance of $2.5 million. This is due to be paid on January 10, 2020. The $2.5 million is actually less than he was entitled to under his employment agreement ($3.4 million). That stipulated he would receive 2x base salary plus target bonus (1x salary). In February 2019, the board also granted him a $1 million long-term cash incentive award that would have started vesting in February 2020. Upon termination, the award vests immediately.

It appears that the company is trying to renegotiate a debt restructuring outside of Chapter 11. However, if the company does file for bankruptcy before January 10, the payment likely won’t be made. Even if Key files after January 10, the payment could be clawed back from Mr Saltiel if it is deemed a preferential payment under the bankruptcy code.

Mr Dodson will receive an increase in his base salary from $425,000 to $575,000 while being the interim CEO. If Mr Dodson is not appointed CEO, he will be entitled to receive an acceleration of his retention bonus that was granted in July 2018. Currently, the remaining 75% or $478,125 will vest in July 2020.

SEC filing – Key Energy CEO departure

Oilfield Services company appoints new CEO

Flotek Industries, based in NW Houston, has appointed John Gibson as its new CEO. He replaces John Chisholm who steps down after seven years as the CEO. Mr Chisholm is also stepping down from the Board.



Mr Gibson joins from investment bank Tudor Pickering Holt where he was Chairman of Energy Technology. Between July 2010 and May 2015, Mr Gibson was the CEO of Tervita Corporation, a Canadian environmental and oilfield services company.

Flotek supplies chemicals for use in drilling and completion of oil wells.  It currently has a market capitalization of $115 million. That’s about the same as the amount of net cash on the balance sheet ($107 million at 30 September).  The cash position arose from the sale of its consumer and industrial chemistry technologies for $175 million in January 2019. The company hasn’t made an operating profit since 2015.

Gibson compensation

Mr Gibson will receive a base salary of $500,000. He will also be granted 570,000 restricted stock units that will vest over the next five years. Mr Gibson is also granted an option to purchase up to 1 million shares at $1.93 per share. This option also vests over the next five years. An option to buy a further 2 million shares at $1.93 per share will vest in stages, according to the stock price. If the stock remains above $7.20 for 20 consecutive trading days, 100% will vest.

Severance payment

Neither the press release nor the SEC filing mentions what severance payments are owed to Mr Chisholm, if any. According to the annual proxy statement filed earlier in 2019, Mr Chisholm is entitled to a payment of $3.6 million (two times base salary and target bonus) if he is terminated without cause. The company filed an amended employment agreement with Mr Chisholm in October 2019. This agreement states that any severance will be paid over 24 months.

SEC filing – Flotek CEO appointment