(Reuters) Tellurian has appointed a new president and general counsel, days after the U.S. liquefied natural gas (LNG) developer ousted co-founder Charif Souki as chairman.
The company's shares were off 15% to about 64 cents a share as investors digested Friday's shake-up that will see co-founder Martin Houston take over as chairman and Daniel Belhumeur as president.
Tellurian will pay Souki at least $6 million in cash as part of its decision to remove him from all executive roles without cause, according to a Tellurian proxy filing. He earned $8.2 million in total compensation last year.
The company said it "may be required to pay" severance if Souki agrees to a separation and general release agreement. A Tellurian spokeswoman did not immediately respond to a request for comment.
Souki's employment contract provides for a cash severance payment of two times his base salary and target bonus, at least $6 million, in addition to any other bonuses or other salaries owed.
Souki and Tellurian eventually will have to agree to financial terms of his departure, said one person with knowledge of the situation.
The stock has more than halved in value this year as Tellurian struggled to recruit customers and investors for the first phase of the Driftwood LNG project. The company at a recent investor presentation said it might sell the first six months' worth of its LNG output to help finance the project.
"Mr. Souki implemented numerous strategy permutations which while innovative, did not translate into shareholder value," said Stifel analyst Benjamin Nolan.
"In our view, given the tenuous financial position as well as Tellurian being competitively behind many of their LNG peers, the path forward is very challenging irrespective of who is in charge."
Belhumeur has served as the company's general counsel and chief compliance officer since 2017. Meredith Mouer, deputy general counsel, will succeed him, the company said.
