Philip Asherman is retiring from his role as president and CEO of CB&I, and he will be replaced by Patrick Mullen, the firm’s current COO, effective July 1, the company has announced.
CB&I’s board of directors approved Asherman’s retirement from his role at the company’s helm and as a member of the board. Mullen will stand for election to the board next May.
In its statement, CB&I credits 66-year-old Asherman for transforming the company from a specialty tank subcontractor to a global tech and energy infrastructure firm, and lauds his focus on employees.
“CB&I’s Supervisory Board is grateful for Phil’s service and congratulates him on his nearly 12 years of leadership of what has become one of the premier energy infrastructure companies in the world,” says L. Richard Flury, nonexecutive chairman of the board.
But Morningstar, the Chicago-based investment research and management firm, writes that the leadership change could usher in a new approach of reduced risk and improved execution at CB&I.
“We believe new leadership will begin to reverse negative sentiment following a rocky stretch of poor execution, cash shortfalls, nagging lawsuits, and sizable share price declines,” the firm writes in a new analysis. “Asherman has been CEO for 12 years, but in recent years he had become something of a lightning rod for investors, in our opinion. His growth-first approach to project bidding and capital deployment has had mixed success.”
Morningstar adds that project execution at CB&I has been erratic.
For example, there’s CB&I’s 2013 $3.9 billion acquisition of the Baton Rouge-based Shaw Group that resulted in a $1 billion write-down and lawsuits involving the sale of Shaw’s nuclear construction unit to Westinghouse, Morningstar writes. A reliance on subcontractor-heavy workforces boosted revenue at the cost of weak productivity, the analysis firm adds.
“Mullen came to CB&I via the 2007 acquisition of technology licensor Lummus Global. He ran the technology and E&C segments at CB&I before being named COO in September 2016,” the analysis says. “We suspect Mullen will attempt to reduce risk and improve execution while retaining the company’s core competitive strengths.”
CB&I announced in March the sale of its Capital Services division to Veritas Capital, a New York-based private equity firm.
Read CB&I’s full statement and Morningstar’s analysis of the leadership transition at the company.
