Cheniere ousts its CEO ahead of export role
Cheniere Energy ousts CEO Charif Souki just weeks before it is set to become the first to export liquefied natural gas from the mainland.
Cheniere Energy’s board has ousted its CEO, just weeks before the company is set to become the first to export liquefied natural gas from the mainland United States, the Houston company announced Sunday.
Charif Souki’s departure comes after a long-running clash with activist investor Carl Icahn, who has become the company’s largest shareholder and named two allies to the company’s board this summer. Icahn has sought to rein in Cheniere’s ambitious expansion plans and has criticized how much it has paid its top officers.
The change is effective immediately.
Neal Shear, a current board member and former head of Morgan Stanley’s commodities business, will serve as CEO while the board seeks a replace-
ment, according to the announcement.
The board also has appointed Andrea Botta, who has served on the board since 2010, as chairman.
“The changes announced today will serve Cheniere well in creating and sustaining shareholder value, while continuing to explore a limited number of strategic initiatives within the LNG industry,” Botta said in a prepared statement.
Under Souki, Cheniere has invested billions into building massive liquefaction plants along the Gulf Coast. The facilities will cool natural gas from U.S. producers into a liquid so it can easily be shipped to customers abroad.
Ambitious expansion
The company’s Louisiana Sabine Pass plant is expected to begin operating by the end of 2015 after years of permitting and construction. Its first shipment will put Cheniere ahead of many companies rushing to build infrastructure to allow cheap natural gas from the U.S.’s prolific shale plays reach higher priced natural gas markets.
Sabine Pass’ shipments also will bring a stream of cash to Cheniere, which has operated at a loss for years while it poured money into construction. The company has simultaneously launched another, billion-dollar export facility in Corpus Christi.
The scale of the company’s ambition has irked some investors, including Icahn, who has a history of buying into companies and pushing for changes that benefit shareholders. Icahn initially bought 19.4 million shares or an 8.2 percent stake in the company in August, and has expanded his holdings to 13.85 percent with several purchases including one announced last week.
High compensation
Icahn also had taken aim at Souki’s large compensation package. In 2013, Souki had the highest compensation package of U.S. executive across all public companies with a mostly stock package valued at $142 million, according to the Associated Press.
In March of this year, Cheniere settled a lawsuit with investors who had sued to limit the company’s stock grants to executives. The agreement limits how much stock Cheniere can grant its corporate officers and requires the company to seek shareholder approval of future grants.
Souki since has sold about one-third of the stock that he owns, totaling about $116 million, according to Bloomberg.
Shares of Cheniere Energy Inc have lost about 40 percent so far in 2015. On Friday, the company’s stock lost $2.16 or 5 percent to $41.29.
Interim CEO Shear is currently a partner at Silverpeak Strategic Partners LP, a private investment company, and has worked as global head of securities at UBS Investment Bank, according to Cheniere.