Baker Hughes will soon become a subsidiary of General Electric and no one is coming out better than Baker Hughes’ chairman and chief executive, Martin Craighead.
Craighead is expected to receive a whopping $41 million, over 40 percent higher than his anticipated $29 million payout if Halliburton had successfully acquired Baker Hughes. GE swooped in and worked out a deal after Halliburton’s attempted takeover fell apart last year. The merger between Houston-based Baker Hughes and GE Oil & Gas is expected to close by the middle of this year.
Baker Hughes will operate as a publicly traded standalone company controlled by GE and Craighead will become vice chairman on the new board of Baker Hughes. As of now, Craighead is paid $13.5 million annually, down from $15 million in 2014 at the height of the oil boom.
After joining Baker Hughes in 1986, Craighead became CEO in 2012.
In addition, five other Baker Hughes executives are set to receive golden parachutes of more than $10 million to leave the company once the deal has been finalized — president Belgacem Chariag, $18 million; technology and products president Arthur Soucy, $16 million; chief financial officer Kimberly Ross, $15 million; senior adviser Richard Williams, $13 million; and chief commercial officer Derek Mathieson, $10 million.
When comparing Craighead’s compensation to the deals other founding CEOs have received, $41 million doesn’t sound like much. For example, when Cheniere Energy displaced its founder and CEO Charif Souki over a year ago, he received over $150 million.
The $32 billion deal will leave Boston-based GE with 62.5 percent of the combined Baker Hughes. GE Chairman and CEP Jeff Immelt will be the chairman of Baker Hughes, with GE Oil and Gas CEO Lorenzo Simonelli as the new Baker Hughes CEO.
Currently Baker Hughes employs about 33,000 people, about half of the 62,000 it once employed before the oil bust began in late 2014. However, some reductions are continuing. The combined Baker Hughes will have more than 70,000 employees, making it much larger than Halliburton and coming in second just behind Schlumberger in the oil field services sector.
Article written by HEI contributor Lydia Ezeakor.