Last day payday
Former SandRidge CEO to receive $26.6M in dismissal
Former SandRidge Energy Corp. CEO James Bennett will receive about $26.6 million in severance after he was fired without cause, the company said in a regulatory filing Friday.
Bennett’s last day at the Oklahoma Citybased oil and natural gas company was Thursday, and Chief Financial Officer Julian Bott will leave the company after the firm’s 2017 annual report is filed, the company said Thursday. SandRidge directors said the executives were removed following discussions with shareholders.
SandRidge provided more details on the firings in a regulatory filing Friday.
Both executives are considered terminated without cause within two years’ change in control, citing the company’s emergence from Chapter 11 bankruptcy protection on Oct. 4, 2016. The language triggers the executives’ maximum payout.
According to the company’s most recent proxy filed in April 2017, Bennett will receive about $26.6 million in severance and Bott will be paid about $10.3 million when he leaves the company.
Bennett is replaced by independent director William M. Griffin Jr., who will serve as interim CEO until five days after his successor is named. Griffin will receive a base salary of $70,000 a month and will be eligible for a bonus of up to 50 percent of his salary if certain metrics are met, SandRidge said in Friday’s regulatory filing.
Bennett on Friday sent an email to all SandRidge employees, praising and thanking them for their efforts.
“Over the past seven years, we have worked together to build a culture that reflected our values, and, moreover, the belief that we could build a business that could thrive for decades,” Bennett said in the email. “As a team, we committed ourselves to nurturing a culture of safety, accountability, innovation, respect and transparency. In the face of numerous challenges in our industry and significant hurdles in our path, our team remained committed and focused. It is a rare thing to have the opportunity to work alongside people who are a source of such inspiration; I am grateful to have served such a dedicated team.”
He specifically praised the members of SandRidge’s senior management team.
“After working alongside this exceptional group of leaders for many years, I can attest to the ability, professionalism and integrity of this team,” he said. “I am confident in their ability to help make this transition successful and positive.”
New strategic plan
Also on Friday, SandRidge directors said they have cut the company’s drilling budget and plan to slash administrative costs as part of a new strategic plan. In a letter to shareholders published on the SandRidge website Friday morning, directors said they have updated the company’s strategic objectives “consistent with market conditions and recent feedback from many of its largest shareholders.”
In Friday’s letter, SandRidge directors said they are instituting changes in the company’s organizational structure designed to cut general and administrative (G&A) expenses by a third, to $36 million to $39 million a year.
“At these new levels of expense, G&A will have been cut by more than half since the company’s emergence from bankruptcy in October 2016,” the directors said in Friday’s letter.
The letter did not detail what changes the company will make to allow for the cost savings.
The directors also said Friday they have approved a 2018 capital expenditure budget of $180 million to $190 million, down from
$247 million last year. The plan calls for one drilling rig in the company’s NW STACK field in northwestern Oklahoma and one rig in Colorado’s North Park Basin.
“The company expects these measures to enhance shareholder value and improve its competitiveness in the marketplace,” the letter stated.
The directors said Friday’s letter is the first in a series of communications “delivering on our pledge to carefully consider concerns voiced by shareholders and to develop, implement and communicate plans of action.”
SandRidge’s largest investors — including activist investor Carl C. Icahn and Fir Tree Partners — for the past four months have been critical of Bennett and company actions. The investors in December successfully blocked SandRidge’s planned $746 million purchase of Colorado-based Bonanza Creek Energy.
Icahn last month
extended his efforts, demanding SandRidge reshape its board and change its policies.
Icahn has been especially critical of SandRidge’s executive compensation, including Bennett’s salary and bonuses last year while shareholder equity was canceled through bankruptcy reorganization. He also blasted the $90 million payout to former CEO Tom Ward when he was fired following a shareholder revolt in 2013.
Fir Tree Partners is the second-largest shareholder at SandRidge with an 8.3 percent stake in the company.
The investor also controls more than 25 percent of Tulsa-based Midstates Petroleum Co., which this week publicly announced a proposal to merge with SandRidge.
SandRidge executives said Wednesday they had received the proposal and would discuss it with the company’s directors and largest shareholders.