Ousted Cheniere Energy CEO plans to remain as board director

By TIM LOH, HARRY R. WEBER and NAUREEN S. MALIK
Bloomberg

You can take the CEO out of the company. Cheniere Energy’s board of directors is learning it’s not as easy taking the company from the CEO.

A day after reporting that Charif Souki had been removed as CEO, chairman and a director of Cheniere’s board, the company reversed course and said in a filing that he’ll actually keep his title as director. Shareholders decide who serves on the board, and Souki said he plans to remain on it until he sees what direction the US natural gas exporter takes.

"I understand they want to change strategy, but I don’t know what that entails," Souki said. "Until I have an opportunity to review what their new strategy is going to be, I’m not making any decisions."

While CEOs have stepped down and become directors on company boards, it’s unusual for a fired one to keep his seat at the table. Souki joins a handful of ousted CEOs who’ve done so, including the former chief of Healthsouth Corp., Richard Scrushy.

‘Further Negotiation’

“Usually, the CEO will leave the board as part of the departure agreement,” said Charles Elson, director of the University of Delaware’s Weinberg Center for Corporate Governance. “Typically if someone is seeking to remain on the board, it’s usually an indication of some kind of further negotiation. Under the circumstances, it may be indicative of some negotiation process still going on between the board and he. We don’t know what he’s trying to negotiate, but that would be the suspicion.”

Souki said Cheniere didn’t seek his input before issuing the conflicting regulatory filings Monday and Tuesday.

“I have a large amount of shares that don’t vest for two and a half years, and I have a significant interest in knowing what direction they want to take the company," the 62-year-old said, adding that he didn’t receive a cash severance after being dismissed and that it’s up to shareholders to decide on board members.

From Aspen

Speaking from Aspen, where he has a home and office, Souki also said that Cheniere’s Sabine Pass liquefied natural gas (LNG) terminal in Louisiana will start producing between Dec. 25 and Dec. 31 and that the first LNG exports will leave in the third week of January. Those were projections as of last week, he said.

Faith Parker, a spokeswoman for Cheniere, didn’t immediately respond to phone calls and an e-mail seeking comment late Tuesday. Carl Icahn, the company’s largest shareholder and a critic of Souki’s strategy for the company, also wasn’t immediately available.

Cheniere’s stock fell 2.1% to close at $39.28 on Tuesday. Shares are down 44% this year.

Souki helped create Cheniere, so “there may be a lot of ego here too,” Elson said. “It’s a little embarrassing to leave under these circumstances.”

Souki, who said Monday that he planned to enjoy being a ski bum, was unfazed by the boardroom confusion over his role going forward.

“I have been on the mountain all day,” he said Tuesday. “I’m not terribly stressed about that. I just hope they manage the company well, and I’m curious what they want to do, and when I find out, because I am entitled to that information and am on the board, I will make those decisions.”

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