By OGJ editors
HOUSTON, Mar. 14 -- Ronald L. Kuehn Jr. has been appointed interim CEO and chairman of Houston-based El Paso Corp., replacing William A. Wise, effective immediately, the company announced Wednesday. Kuehn, lead El Paso board member and chairman, president and CEO of Sonat Inc. before it merged with El Paso, will remain in the top position during the company's search for a replacement CEO.
Commenting on the decision, Ronald Barone, analyst with UBS Warburg LLC in New York, said, "Though history has shown us that such unexpected announcements could suggest further 'shoes to drop' at special situations such as El Paso, after discussions with . . .Kuehn and our own observations of the tremendous toll this situation was taking on Wise . . .we are not convinced there are."
In addition, Barone said, ". . .the departure of . . .Wise may take some of the proxy pressure off the company while expediting the search for a permanent replacement. Moreover, it may improve the prospects for a settlement with California before (the US Federal Energy Regulatory Commission) rules on the issue on Mar. 26."
Kuehn said, "(El Paso) is making steady progress on executing our business plan." So far this year, El Paso has closed on, or signed agreements for, about 45%, or $1.5 billion of the $3.4 billion of asset sales it expects this year, which includes the sale of its natural gas and oil reserves in the US Mid-continent to Chesapeake Energy Corp. for $500 million (OGJ Online, Mar. 4, 2003).
Wise will receive severance benefits that were provided for under a preexisting employment agreement, the company said. The benefits for the remaining 3-year term of the agreement include Wise's salary, half of his annual bonus, and pension benefits. "(Wise's) outstanding loan obligations will remain payable to the company. Under the agreement, (he) will no longer be eligible to receive change in control benefits," the company said.
