U.S.-based natural gas supplier Cheniere Energy Inc.’s board voted Sunday to replace CEO and co-founder Charif Souki after directors disagreed with him over expansion plans. The move comes just four months after activist investor Carl Icahn took a big stake in the company and won two board seats.
The board decided over a weekend meeting to clamp down on the co-founder’s plan to build a second natural gas export facility in Texas even before their first in Louisiana is up and running, according to multiple media reports. Souki also suggested at the meeting that the company expand into other parts of the energy industry.
However, the board disagreed with his budget requests and voted unanimously for Souki to be replaced on an interim basis by Neal Shear -- a Cheniere board member since June 2014.
The company also announced that board member Andrea Botta will serve as chairman, effective immediately. Cheniere’s directors said the company needed a more experienced operator as it nears completion of the Louisiana export facility, Financial Times reported, citing people familiar with the meeting.
Cheniere will be the first company to export natural gas from mainland U.S. when it starts sending shipments from its multi-billion dollar natural gas export facility along Louisiana’s coast in early 2016. The facility -- initially built to import natural gas -- was converted into an export terminal after a boom in U.S. shale reserves rendered import facilities largely obsolete.
Souki, who spearheaded the turnaround, took home a salary of about $142 million in 2013, which made him the highest-paid U.S. executive that year and caused irate shareholders to file lawsuits over his compensation. In 2014, Cheniere cut Souki’s salary to $1 and settled a lawsuit over additional shares being issued to company executives. The company, which has a market value of about $9.7 billion, lost about 41 percent of its share price this year.
The boardroom battle comes as Icahn upped his stake in the company to 13.8 percent last week, up from 8.2 percent this summer, according to reports. Icahn, currently Cheniere’s largest stake holder, also placed two lieutenants -- Samuel Merksamer and Jonathan Christodoro -- on the board.
In a statement Monday, Icahn said he fully supported the board for "having the guts" to replace Souki, adding that there was "little doubt that the board wished to move the company in a direction that differed greatly from the path Souki wanted."
When Icahn announced his stake in Cheniere in August, he said he would seek to discuss “operations, capital expenditures, financings and executive compensation” with the company.
The company will immediately begin its search for a permanent CEO, a release from Cheniere said.