Hession is an incompetent tool, except when it comes to negotiating employment agreements, no doubt.
However, he can't be saddled with much of the drop on the Total announcement. It was Mulacek that consistently touted huge per mcf deal figures, including blatently lying about a $7 figure ("yes sir!" - remember that?).
Before the deal I expended much energy arguing with Tibbs and others based on actual deal comps that a deal would be much lower (including the Anadarko Mozambique deal, and many others). The actual deal was right in the strike zone.
So a lot of the stuffing coming out of IOC was just bridging Phil's delusions and/or lies, and reality. No doubt Hession picked up the value destruction baton with gusto.
Big lesson is don't invest in management that isn't trustworth, or incompetent. Ever. Lots of other risks out there without stacking the deck against yourself by investing in bad management.
This asset could have been proven up and production tested (remember those debates - now they have done it) 5 years ago and sold off.
Truly a shame. THE problem now is the balance sheet. Hession has blown the nest egg and how he handles that will be fun to watch. Running to OSH and merging without a premium could be the least bad alternative.
It's kind of sad.
My conclusion is Phil and Hession are both buffoons but in different ways.
IMHO Phil acted and behaved like a #$%$. Pumping garbage wells in the early days and so on, by the time E/A came along nobody believed him and he was a well-deserved target for short sellers. His crazy schemes with Flex LNG and other nonsense made it worse. The lawsuit in Singapore about Phil and Carlo's private jet being paid by IOC secretly probably just the tip of the iceberg. I think Phil is a #$%$. However, it appears, especially now, that he believed IOC was worth a lot. So much so, apparently, that he scuttled every orthodox plan for the sake of his riverboat fantasies. A fool, but despite the kleptocracy he ran was at least partial aligned with shareholders.
Hession, frankly, seems to be just an incompetent tool. It's not his fault oil is in the tank, but how he reacted is unforgivable. After the Total deal, IOC's greatest strength was the balance sheet. They could have survived many more years on that waiting out the market. Instead, he blows upwards of a billion dollars - practically frittered away. Now the company is weak and vulnerable. A merger with OSH is quite possible with Hession the
fool taking over for Botten.
Shaking my head still after all these years.
Hope everyone is well.
IOC is a Foreign Private Issuer. As such it is exempt from Reg FD. Sad but true.
If you want to complain about selective disclosure you have to go to the Canadian regulators and look at NP 51-201.
Sorry I made an error. It was even more. What I meant is that the $2.76M bonus was lumped in with those other "incentives" for $3,358,000.
That brings the cash to $4.9M, not $4.3M.
I noted Hession earns $100,000 per month in base salary alone. Oilhog asked for confirmation so here we go.
If you look at the proxy for 2015, page 20, you will see the comp table.
Hession's base salary for 2014 was $1,230,000. 2013 was pro-rated but as I recall it was based on $1.2M even so the extra $30k is likely an inflation adjustment of exactly 2.5% so I estimate his base for 2015 will be $1,260,750, or $105K per month.
But of course there is way more.
He also got paid a "housing allowance" "travel allowance" (not official travel) "transport allowances" (I guess travel is difference from "transport", my guess is maybe they pay for a Lamborghini or something), and medical plus a pension as you can't save for retirement on only $105K per month.
These were an additional $243,296.
So call that about $1.5M so far, but there's more.
He also gets paid "fixed and discretionary short term incentives". That is lumped in with a $2,760,000 cash "milestone bonus" for signing the deal with Total that cut the share price in half the day he signed it.
So really it was only about $4.3M in cash.
Of course that excludes another $2.1M in restricted stock units. Of course these RSUs are priced on prevailing market prices so the lower the share price is, the more free shares he gets, all things being equal.
Last I checked he has spent a cumulative total of zero dollars buying shares of IOC.
And now they might merge with OSH in the toilet with him taking over a new kingdom with surely a much larger fresh package.
Will be the worst year possible to have a weak balance sheet.
I've seen zero evidence that Hession is aligned with shareholders. Seems now his personal play may be a merger with OSH with him running the new show. Would probably get reloaded with huge option grants with both OSH and IOC in the dung heap, and a massive salary increase (the $100K he gets per month now would seem light).
Total's game plan is obvious - they have zero interest in moving this thing to FID any time soon. Even Qatar is doing $5/mcf offtake deals now which barely cover liquefaction and transport. It's in their interest to delay as long as possible, get IOC on the mat, then stick the knife in.
Could be a situation where IOC's cash runs dry and they have to cut a deal where Total takes over the burn out of the future "resource" payment, with a commensurate pound of flesh.
I see a lot of risk here.