trending Market Intelligence /marketintelligence/en/news-insights/trending/bvc8obx764jdpvya-hkitw2 content esgSubNav
In This List

Schlotterbeck abruptly left EQT after disagreement on pay

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Using ESG Analysis to Support a Sustainable Future

Research

US utility commissioners: Who they are and how they impact regulation

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?


Schlotterbeck abruptly left EQT after disagreement on pay

Former EQT Corp. CEO Steven Schlotterbeck's abrupt resignation from the company that he made America's top natural gas producer was caused by a disagreement over the size of his paycheck.

"The 'personal reasons' cited in the press release does not mean that I or my family have any health issues nor is there any sort of #metoo scandal brewing," Schlotterbeck posted on his LinkedIn page March 16. "It was just a plain vanilla disagreement between me and board on my value to the corporation."

In 2016, the most recent year on record, Schlotterbeck earned just over $5 million in total compensation, $2 million of which was in cash, according to S&P Global Market Intelligence data.

By comparison, Chesapeake Energy Corp. CEO Doug Lawler earned about $7.4 million in total compensation in 2016, $4.5 million of that in cash. Dan Dinges, CEO of another huge Appalachian Shale driller, Cabot Oil & Gas Corp., earned about $6.8 million in total compensation in 2016, $3 million of that in cash.

In what has been a brutal year for shale gas stocks that are increasingly tied directly to the declining commodity price of natural gas, EQT shares have lost 13.6% in value, Cabot has gained 12.5%, and Chesapeake has lost 44.6%, as of market close on March 15.

One possible burr in Schlotterbeck's saddle may be the compensation awarded to recently departed CEO and still EQT Chairman David Porges. Porges was paid nearly $10 million in 2016, his last full year at the company, with $3.7 million in cash.

While Porges spent years building EQT up from Pittsburgh's local gas company to a huge shale gas producer, it was Schlotterbeck that pushed EQT past Exxon Mobil Corp. to become the top U.S. natural gas producer by volume with a $6.7 billion merger with Rice Energy Inc., a merger Schlotterbeck almost walked away from.

Shares in America's largest natural gas producer EQT slipped 7% March 15 in the wake of Schlotterbeck's departure only to claw back 1.5% in moderate trading by the March 16 close.

Schlotterbeck's departure came at a time when EQT is rearranging its assets to better separate its midstream and upstream units while at the same time parceling out newly acquired Rice Energy and Rice Midstream Partners LP's assets to either EQT or EQT Midstream Partners LP.

Stepping back in to replace Schlotterbeck will be Porges, who retired a year ago, a prospect that analysts said bodes well for EQT shareholders waiting to see an increase in value, particularly for the upstream drilling unit, when the restructuring is completed.

"Who better to call out of the bullpen to navigate the company through this complex structural breakup than the person that created it?" Wolfe Research LLC analyst Josh Silverstein said before Schlotterbeck's reasons were revealed. "Chairman of the board (he just retired as executive chairman two weeks ago), former CEO, and almost 20 year executive at EQT, Dave Porges has been named interim president and CEO. We're happy to see a familiar face who knows the asset base better than anyone and reiterated the plan to separate the two business units, even if he is in the seat only for a few months as a CEO search process is underway."

As for Schlotterbeck, he is "looking forward to having some time off and excited about whatever is next!" according to his LinkedIn post.