Sysco Corporation has appointed Aaron Alt as its new CFO. He replaces Joel Grade, who moves to Executive Vice President, Business Development.
Sysco, which has its head office in west Houston, has sales of $52 billion and 57,000 employees. Its market capitalization is $38 billion.
Mr Alt joins from Sally Beauty Holdings in Dallas, where he had been CFO since October 2018. Prior to that he spent six years in various roles at Target and eight years at Sara Lee Corporation. Mr Alt will receive a base salary of $775,000 and a one time cash sign-on bonus of $365,000.
Mr Grade, who joined the company in 1996 and had been the CFO for five years, will continue to receive a base salary of $690,000 in his new role. The BD role will be primarily focused on mergers and acquisitions.
Sysco has been making a number of changes since former CEO, Thomas Bené was jettisoned after two years in the role, in January 2020, with a $6 million cash severance. At the time, the Board, which includes activist investor Nelson Peltz, announced that the company needed to ‘accelerate performance, fully capitalize on scale advantages and drive meaningful operating improvements’.
- New CEO Kevin Hourican joined from CVS Health. He got over $16 million in cash and equity awards to compensate for forfeited equity from CVS.
- Last month, the company announced that Michael Foster, the Chief Information and Technology Officer, who only joined the company in December 2019, will leave at the end of the year. He will get a $1.3 million severance (2x base salary).
- At the same time, Judy Sansone joined from CVS Health as Chief Commercial Officer.
- Tim Ørting joined in September as President of the International Operations.
- Marie Robinson joined in March 2020 as Chief Supply Chain Officer.
Understandably, top line sales have dropped dramatically due to the pandemic. In the April-June quarter, sales dropped 42%. In the most recent quarter it was a 23% decline.
SEC filing – Sysco CFO
Houston Wire and Cable has removed the interim tag off Eric Davis. He had been interim CFO since June when Chris Micklas left to join a start-up company.
Houston Wire is a distributor of electrical and mechanical wire and cable with revenues of $340 million. Approximately a third of its revenues come from the energy sector. It has a market capitalization of $46 million. The company has its head office near the 610/I-10 interchange on the east side.
Mr Davis joined the company in 1993 and initially spent 14 years as the Controller of the company. Prior to being appointed CFO, he was the President of the Heavy Lift division.
He will receive a base salary of $265,000.
You can see the complete list of Houston public companies and their CFO’s on my blog here
Houston Wire and Cable – Davis appointment
Ryan Stash has been appointed the new CFO at Evolution Petroleum. He replaces David Joe who has been at the company since 2005 and has been CFO since January 2016.
Evolution is an small E&P company with its head office in west Houston. It has an interest in the Delhi field in Northeast Louisiana, and an interest in the Hamilton Dome field in Wyoming. The company has a market capitalization of $72 million. It has no debt and $20 million of cash on hand.
Mr Stash joins from Harvest Oil & Gas where he had been CFO since October 2018. Prior to that, he spent eleven years in the Energy Investment Banking Group of Wells Fargo Securities. He will receive a base salary of $265,000.
According to the SEC filing, Mr Joe and the Board ‘agreed to the terms of his retirement as the Chief Financial Officer, effective December 31, 2020’. However, those terms were not disclosed in the filing. The annual proxy statement, filed last week, states that there are no employment agreements for executive officers.
SEC filing – Evolution CFO
US Physical Therapy has appointed Carey Hendrickson as its new CFO. He replaces Larry McAfee, who is retiring.
The company operates 551 outpatient physical therapy clinics in 39 states as well as managing 32 physical therapy facilities for third parties. It also has a industrial injury prevention division. The company has its head office in west Houston and has a market capitalization of $1 billion.
In March and April, many of its clinics were closed. At the lowest point in mid-April, visits were about 45% of pre-pandemic levels. By August, they were at 85%, The company cut costs aggressively through salary reductions, furloughs and rent deferrals. It increased its EBITDA in Q2 over Q1, despite revenues being down nearly 30%.
Mr Hendrickson joins from Capital Senior Living Corporation, a publicly-traded company based in Dallas (market cap $20 million), where he was CFO. Prior to joining them in 2014, he was the CFO at Belo Corp, the operator of television stations. Mr Hendrickson will receive a base salary of $450,000. He also received a grant of stock worth $400,000 that will vest over four years.
Mr McAfee has been CFO since joining the company in 2003. He originally announced his intention to retire back in January 2020 but later deferred the intended retirement date because of the pandemic. He will stay on until the Annual Meeting in December, at which point he will resign from the Board. Mr McAfee will then enter into a six month consulting agreement where he will be paid an hourly rate, on an as-needed basis.
SEC filing – US Physical Therapy new CFO
Jennifer Whalen has been appointed the CFO of Bristow Group, the helicopter company that has its head office in west Houston.
Bristow merged with ERA Group in June, in an all-stock transaction. Although Bristow shareholders ended up with 77% of the combined company, it was mostly ERA management that took the senior roles in the combined group.
Ms Whalen joined ERA in 2012 and was appointed interim CFO in June 2017. The interim tag was removed in February 2018. After the Bristow/ERA merger, she was again named interim CFO. The company stated that a permanent CFO would be named later.
Ms Whalen is rewarded for her patience with a pay raise of $70,000 to $380,000. She also received a one-time equity award of 11,667 shares of performance-vested restricted stock and 11,667 stock options.
At the time of the merger, the company said it expected to achieve annualized cost savings of at least $35 million. This would occur through the elimination of duplicate corporate expenses and greater operational efficiencies. Last month, the company increased that amount to $45 million. It said it had already realized $16 million of annualized savings.
SEC filing – Bristow Whalen CFO appointment
Jason Wells has been appointed the new CFO of Centerpoint Energy. He replaces Xia Liu, who bolted in May, after less than a year to become the CFO at WEC Energy. Kristie Colvin, the interim CFO, reverts to her previous role of Chief Accounting Officer.
Mr Wells joins from PG&E Corporation, the embattled California utility. He joined PG&E in 2007 and became CFO in January 2016. PG&E filed for bankruptcy in January 2019 and exited in July 2020, with a newly-reconstituted board. 11 of the 14 directors are new. The CEO, Bill Johnson, stepped down on June 30, having been in the role for only 15 months. The company had also announced plans to move its head office from San Francisco to Oakland.
Mr Wells will receive a base salary of $650,000 and a sign-on equity award of restricted stock units worth $1 million, that will fully vest in two years. The company will also buy his residence in San Francisco and pay for relocation expenses.
Centerpoint appointed Dave Lesar, the former Halliburton CEO, as its new CEO on July 1. Under pressure from activist investor, Elliott Management, the company is slimming down to become more of pure-play utility company.
SEC Filing – Centerpoint Wells appointment
RCI Hospitality has promoted Bradley Chhay to CFO, replacing Philip Marshall, who is retiring from that role. Mr Chhay joined the company in November 2015 as Controller. He had previously worked for Live Nation and RigNet.
Mr Chhay, age 36, will have a base salary of $400,000. Mr Marshall, age 70, had been the CFO since May 2007. He will stay on at the company, focusing on income tax matters.
RCI operates adult nightclubs such as Rick’s Cabaret and restaurants and sports bars under the Bombshells brand name. It has 48 units in total, though only 34 were open at the beginning of September. The company’s head office is in NW Houston.
Like other hospitality businesses, it has been hit hard by the pandemic. Revenue for the three months to June 2020 were only a third of revenues from the comparable period, though the company states that business has somewhat recovered since. It managed to generate a positive cash flow in the quarter as a result of deferring payments that are real estate related.
Last year, the company came under fire from anonymous short sellers who alleged a series of related party transactions that were not disclosed in SEC filings. The company conducted an internal review that mostly vindicated ‘Big Rick’, the anonymous blogger. It also strengthened its related party transaction policy and vowed to appoint at least one independent director.
A formal SEC investigation into the company is still ongoing.
So, I find it amazing that the SEC filing announcing Mr Chhay’s appointment also disclosed that his brother holds a $100,000 promissory note from the company. It’s good that the company correctly disclosed it, but it shows the pervasive amount of related party transactions.
SEC filing – RCI Hospitality CFO appointment
Michael Pearl, the CFO of Western Midstream Partners, will be leaving the company, although the company didn’t say when! Michael Ure, the current CEO, is taking over the CFO duties until a successor is identified.
Western Midstream is a master limited partnership that went public in 2008 as a subsidiary of Anadarko. It’s now owned by Occidental, following its takeover of Anadarko last year. It has its head office in The Woodlands.
Mr Pearl joined Anadarko in 2004. He was the CFO of the general partner of Western Midstream for two years straddling the IPO. After that, he held senior financial roles in Anadarko until he became the CFO of Western Midstream in October 2019. His base salary was $455,000.
In August 2019, ahead of his proposed appointment, Mr Pearl entered into a retention agreement that provided for three cash payments of $261,000 each, to be paid in February 2020, August 2020 and February 2021. If he was terminated without cause, the unpaid amounts would vest. In signing the retention agreement, Mr Pearl waived his right to additional severance payments.
SEC filing – Pearl departure
Kevin Andrews has been appointed CFO at Battalion Oil Corporation. He replaces Ragan Altizer, who plans to retire.
The company is based in downtown Houston and has working interests in approximately 52,000 net acres in the Delaware Basin. Its market capitalization is currently $126 million.
The company was formerly known as Halcon Resources. It went into bankruptcy in August 2019. The company emerged in October 2019, having eliminated over $750 million of debt. In return, the debt holders got 91% of the newly reorganized equity.
The company changed its name to Battalion Oil Corporation in January 2019 and regained its listing on the NYSE American the following month.
Halcon hit the headlines in February 2019 when Floyd Wilson (then CEO), Mark Mize (CFO) and Steve Herod (Corporate Development) all left on the same day. This happened two weeks after an activist investor had criticized the excessive corporate overhead at the company. Under the terms of their contracts, the terminations were considered terminations without cause. Combined, the three executives got over $9 million in cash severance.
Quentin Hicks was promoted to CFO, following the departure of Mr Mize. However, he resigned in July 2019, after four months, to become CFO at Gulfport Energy.
Mr Altizer became CFO in August 2019. He and CEO Richard Little (appointed in June 2019) worked together at Ajax Resources, an E&P company whose assets were sold to Diamondback Energy in October 2018.
Mr Andrews has spent most of his career in investment banking. Most recently, he was the Head of Energy Investment Banking at Imperial Capital. He will receive a base salary of $350,000.
SEC filing – Battalion Oil CFO appointment
Cheniere LNG – Sabine Pass – Roy Luck
Cheniere Energy has appointed Zach Davis as its new CFO. He replaces Michael Wortley, who steps down from the role, effective immediately. Mr Wortley will remain employed through the end of the month.
Cheniere is based in downtown Houston and was the pioneer in developing Liquified Natural Gas (LNG) for export. It currently has a market capitalization of $13 billion.
Mr Davis joined the company in 2016 as the VP of Finance and Planning and was promoted to Senior VP, Finance in February 2020. Prior to joining Cheniere, he held energy investment banking and finance roles at Credit Suisse, Marathon Capital and HSH Nordbank.
Mr Davis will receive a salary of $500,000. He also received a restricted stock grant for the same amount that vests over three years.
Mr Wortley, 43, has been CFO since January 2014 when the market cap of the company was about $10 billion. He joined Cheniere in 2005. He will receive:
- a cash severance bonus of $2,857,000 when he leaves.
- a cash payment of $1,946,000, payable in February 2021.
- one year’s salary ($715,000) to be paid over the next year.
- $75,000 transitional allowance for health insurance or other associated expenses.
- Vesting of restricted stock and performance stock awards that were scheduled to vest in 2021 and 2022. At the current stock price, I think these are worth around $5.5 million.
SEC filing – Cheniere CFO change