Unocal Announces Changes in Management, Severance Plan
Unocal Corp., long seen by analysts as a takeover target, announced a power shift in its executive suite Tuesday as well as an enhanced severance package for U.S. employees if the El Segundo company were to be acquired.
The management changes were prompted by the expected Dec. 31 retirement of Roger C. Beach, the 64-year-old chairman and chief executive, who has spent nearly 40 years with the company.
The chief executive job will go to Charles R. Williamson, 52, Unocal’s executive vice president of international operations. Timothy H. Ling, 42 and the company’s executive vice president of North American operations, will become president and chief operating officer.
Unocal, the country’s 12th-largest oil company, portrayed the severance program as routine and not sparked by any current merger negotiations. But the plan was seen by analysts as a form of pre-acquisition maneuvering.
“This is like a prelude to a kiss. They are coming very close to being kissed--it’s a question of who it would be,” said Fadel Gheit, senior energy analyst with the investment firm Fahnestock & Co. in New York.
The oil industry has been roiled by mergers during the last two years that have created a new trio of “supermajors,” led by Exxon Mobil Corp., followed by a second tier of companies. The latest proposed combination, of Chevron Corp. and Texaco Inc., would create the world’s fourth-largest publicly traded oil company if approved by the Federal Trade Commission.
Unocal said Tuesday that it is not in merger negotiations.
“We are not holding discussions with anyone concerning a sale, merger or other acquisition of the company,” Beach said.
The severance program, he said, is designed to help the company “retain and attract talented employees in the current competitive labor market and ensure that employees are treated fairly in case a change of control of the corporation should ever occur.”
The new program provides additional salary and benefits for employees who are laid off or resign under certain conditions within two years of a change of control. The packages would be available to about 2,800 Unocal employees in the U.S., and the company said it is considering extending the program to its 4,200 additional employees worldwide.
“This is not a golden handshake, but it is a silver handshake,” Gheit said.
Like other oil companies, Unocal has been enjoying big profit from exploration and production that recent high oil prices have brought. But Unocal no longer owns any gasoline stations--the 76 brand was sold to Tosco Corp. in 1997--so its earnings have been shielded from the relatively weaker margins of the refining business.
Williamson joined Unocal in 1977 and has broad experience in company operations. Ling, who also oversees the development of e-commerce opportunities for Unocal, joined the company in 1997 as chief financial officer.
“The timing of my retirement is part of an orderly succession that the board and I have been working on for the past two years,” said Beach, who became chief executive in 1994 and chairman in 1995.
“Chuck Williamson brings global experience and a track record of success to the CEO position. He can take Unocal to the next level of performance and capture the full value of our growth portfolio.”
Unocal’s board named John W. Creighton Jr., one of the company’s outside directors, to the post of nonexecutive chairman of the board, effective Jan. 1. Creighton, 68, was president and chief executive of Weyerhaeuser Co. from 1991 until his retirement in 1997.
Unocal shares rose 6 cents to close at $35.38 on the New York Stock Exchange. The announcement came after the close of regular U.S. trading.
