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Instability in the boardroom is the hallmark for the last five years at Lamprell (LSE:LAM). John Kennedy, an outsider, was appointed Executive Chairman in June 2012.
Following an investigation by the FSA for failing to tell shareholders promptly about problems that led to five profit warnings in seven months CEO, Nigel McCue, was ousted in October 2012. Other departures that month included Jon Cooper as CFO, who had only been there one year, and Chief Operating Officer, Chris Hand, a long-serving staff member, only promoted to the post of COO in 2010.
The group’s shares, which were trading above 360p in May 2012, touched a low of 70p later in 2012 after higher costs and delays to contracts were announced. The fifth profit warning, caused mainly by a cost overrun on a Fred Olsen order, meant a loss of over $100m for the year.
Despite talking of 2013 being a “recovery year”, with a gradual return to profitability, the company was forced to enter discussions with its banks at the end of 2012 to secure waivers of its banking covenants.
In March 2013 James Moffat was appointed CEO from outside the company. An engineer with more than 35 years of experience, he left a Houston-based engineering, construction and services company, KBR Group, where he served in a variety of senior management roles, e.g. executive director responsible for one of the world’s largest natural gas projects.
Frank Nelson was appointed interim CFO in November 2012, joining from Galliford Try. In June 2013 he was promoted to permanent CFO, but quit only two months later for personal reasons. He did this on the eve of presenting the company’s results, saying he wanted to spend more time with his family in the UK.
It was only 14 months later that his successor Joanne Curin (another outsider when she joined in October 2013), quit, with no successor lined up. Tony Wright, who had joined the company only in 2013 as Vice President Finance stepped up to Deputy Chief Financial Officer. In August 2015 he was promoted to CFO.
Niall O’Connell, who had joined Lamprell in April 2013 as Vice-President (Projects), was promoted in October 2015 to Chief Operating Officer of the Group.
Upset shareholders
In the summer of 2014 shareholders were so annoyed with the company’s remuneration report and policy, particularly regarding shares awarded to CEO James Moffat on joining the previous March, that 41% voted against. This was the third year in a row that shareholders rebelled against pay.
Moffat was meant to get the shares, worth $753,000, at the time of joining, but because the company was in a long restricted period when awards could not be made this was not possible. So Lamprell granted the shares in 2014 to be “tested” over the three years to March 2016, according to the company’s long-term incentive plan. Moffatt also got a $208,000 signing on payment to compensate for payments he missed out on at his former employer.
Remuneration in 2014 and 2015
Judge for yourself whether the remuneration policy is too generous:…….To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
