By Rachel Adams-Heard
Board member William Berry will take over as CEO at the start of next year, according to a statement released Wednesday. Jack Stark, currently president of Continental, will become chief operating officer.
Hamm, who famously wrote his ex-wife a check for almost $1 billion to settle their divorce, has been CEO of Continental since he founded it in 1967. The bulk of Hamm’s fortune is tied to Continental’s stock: He held 77% of the company’s shares as of June and has a net worth of $9.9 billion, according to data compiled by Bloomberg.
“I’m not going anywhere,” Hamm, 74, said in a video posted online. “I love this business, I love this company.”
The youngest of 13 children born to sharecropper parents in Oklahoma, Hamm grew up milking cows and feeding chickens. At the age of 20, he bought a water pump truck to deliver drilling fluids and to service drilling rigs, a business that ultimately became Continental.
The Oklahoma City-based company grew into one of the most high-profile names in the fracking boom of the past decade, with operations spanning the Bakken shale play in North Dakota and Montana as well as in the Scoop oil basin in Oklahoma. President Donald Trump has regularly sought out Hamm’s expertise in the energy industry. The two have repeatedly met since Trump took office to promote issues such as crude exports.
Hamm’s departure from the CEO role comes as shale explorers are having to slow production growth amid pressure from Wall Street to adhere to financial discipline after years of cash burn. Continental has fallen 27% in the last year, lagging behind the Russell 1000 Energy Index, which is down about 7%.
The billionaire CEO mused during an August conference call with analysts and investors that remaining a public company might not be worth the trouble. While the comments sparked speculation that he could take the company private, he later said during a Bloomberg Television interview that wasn’t his intention.
Hamm’s move to executive chairman wasn’t “totally unexpected” given his age, KeyBanc Capital Markets analyst Leo Mariani said in a note to clients, adding that the news shouldn’t move the company’s shares. Continental was almost unchanged in after-market trading at 5:51 p.m. in New York.
Berry, who spent most of his career at ConocoPhillips and didn’t join Continental’s board until 2014, was an “easy selection,” Hamm said in the video.
“Sometimes CEO changes happen when companies are having problems,” Berry also said in the film. “That’s not the case here.”
Berry, 66, will get an annual base salary of $1 million and is eligible for a bonus targeted at 125% of his base earnings. He will also get an initial restricted stock award of $24 million, which will vest between 2021 and 2023, the company said in a filing with the Securities and Exchange Commission. Hamm will get a salary of $1.32 million as chairman, along with continued use of a car and the company’s aircraft.
Describing himself as an “oil finder and geologist at heart,” Hamm said that he and Berry will work together to cultivate “new strategic opportunities” for Continental. “Let’s go find some oil,” Hamm said.