• After about six years in the position
• Fernando Araujo taking over
• Smith will remain as Executive Chairman at Berry
• Smith spoke at length and said 191 words

(exechange) — Dallas, Texas, November 30, 2022 — Trem Smith, chief executive of Berry, leaves his position — as “mutually agreed.” As announced by Berry Corp. in a news release published on Tuesday, November 29, 2022, and in a regulatory filing published on Wednesday, November 30, 2022, Arthur (Trem) Smith leaves his post as chief executive officer at the independent upstream energy company, after about six years in the role, effective January 1, 2023.

The average tenure of CEOs who announced their departure over the past 12 months was 8.2 years. This is according to data collected by CEO-exit research firm exechange.

exechange tracks CEO departures at the 3,000 largest publicly traded companies in the U.S., examines the reasons CEOs leave and determines the Push‑out Score™, a measure of pressure on departing chief executives on a scale of 0 to 10.

Trem Smith’s duties as CEO will be taken over by Fernando Araujo, currently Chief Operating Officer at Berry Corp.

Trem Smith’s move coincides with a management shake-up also involving the positions of Chief Financial Officer; and President.

“Reducing overall expenses”

Berry did not give an explicit reason for Trem Smith’s departure from the CEO post. Smith said: “The Board and I are confident this is the team to lead Berry’s future success by continuing to strengthen our operations while reducing overall expenses to deliver top-tier returns of capital to shareholders.”

The three most common reasons given for CEO departures over the past 12 months are performance issues (24.6% of cases), reference to a planned succession (17.4%) and the statement that now was the right time for a change (9%), according to exechange data. Other reasons given for CEO departures included pursuit of other opportunities (6.2% of cases), personal reasons (3.4%) and conduct issues (2.5%). Rather rarely mentioned departure reasons are health problems (2.2% of cases), career change (2.2%), time with family (0.9%), disagreement (0.6%) and death (0.6%). Sometimes, more than one reason was given. In 30.2% of cases, no reason was given.

Smith will remain as Executive Chairman at Berry

Berry stated: “Berry Corporation (bry)(NASDAQ: BRY) today announced the evolution of its executive team, effective January 1, 2023:

• Trem Smith, Berry’s current Board Chairman, President and CEO, to become Executive Chairman.
• Berry’s current Chief Operating Officer Fernando Araujo to become Chief Executive Officer (the position of COO will be eliminated).
• Berry’s current General Counsel and Corporate Secretary Danielle Hunter to become President with responsibility for the Legal, Finance, Human Resources, and Health, Safety and Environmental functions
• Berry’s current Chief Accounting Officer Mike Helm to become Chief Financial Officer (also maintaining Chief Accounting Officer designation). Cary Baetz, Berry’s current CFO and member of the Board, will remain at the Company in his board role and as a special advisor helping in the transition until March 2023.”

“Step down”

Berry said: “On November 28, 2022, the Board of Directors (the “Board”) of Berry Corporation (bry) (“Berry Corp.”) and Arthur “Trem” Smith, Berry Corp.’s current Board Chair, Chief Executive Officer and President, mutually agreed that Mr. Smith will step down from his roles as President and Chief Executive Officer of Berry Corp. and will transition to the position of Executive Chair of the Board effective January 1, 2023.”

Share price decline since November 2018

The announcement follows a decline in Berry Corp.’s share price of 38% since November 2018.

In the position of CEO since 2017

Trem Smith became CEO of the Company in 2017.

Trem Smith has served as Chief Executive Officer, President and director since March 2017 and as Board Chair since February 2019.

Prior to being named Chief Executive Officer, Smith began an informal consulting relationship with Berry in May 2016, followed by a formal consulting relationship in October 2016, then served as interim Chief Executive Officer until his formal appointment in March 2017.

Smith has over 36 years of experience in the oil and gas industry.

In January 2014, Smith founded TS&J Consulting, where he served until joining Berry, which focused on providing consulting services to distressed companies and assets in the United States and United Kingdom.

From January 2007 until January 2014, Smith was President and Chief Executive Officer at Hillwood International Energy, L.P. and HKN Energy Ltd., which focused on discoveries and production in the United States and northern Iraq.

Smith spent 25 years of his career at Chevron Corporation (NYSE: CVX), from 1981 until 2006, where he served in a number of leadership positions with increasing responsibilities in Russia, Thailand and multiple locations in the United States, including La Habra and San Francisco, California.

While at Chevron, Smith was exposed to all phases of the business, including production, operations, exploration, business development, mergers and acquisitions, finance and technology.

Smith graduated magna cum laude from Amherst College with a major in Geology and minor in Russian and received a Master’s degree and PhD in Geology from Pennsylvania State University.

191 words by Trem Smith

Trem Smith spoke at length and said 191 words in the official leadership-change announcement.

“Optimize our assets and maximize shareholder return”

Trem Smith stated: “Since joining Berry six years ago, the Board and I have worked to develop a group of strong and capable leaders to ensure the Company’s continued success. Fernando’s entrepreneurial spirit and strong operational experience managing our assets have delivered excellent shareholder returns and he has proven his leadership abilities and suitability to lead Berry. Among other strengths, he has demonstrated the ability to be flexible in ever changing environments, adapting to successfully execute on our strategic goals, while delivering strong health, safety and environmental performance. The foundation for the company’s future success is built on a strong, value-creating shareholder return model, a cash flow generating hedge book, and a portfolio of oil producing assets that underpin the Company’s ability to deliver strong cash flow results. The Board and I are confident this is the team to lead Berry’s future success by continuing to strengthen our operations while reducing overall expenses to deliver top-tier returns of capital to shareholders. I’m proud of what we have accomplished together over the past 6 years and am positive this team will continue to execute our proven plan to optimize our assets and maximize shareholder return.”

Over the past 12 months, 26% of all outgoing CEOs remained silent in the departure announcement, according to data compiled by exechange. Departing CEOs who did make a statement said an average of 111 words. The longest statement was 382 words, and the shortest statement was 23 words. Statistically, management changes are associated with high pressure when outgoing CEOs provide conspicuously short, excessively long or no explanations of their move, according to exechange data. In contrast, leadership transitions are statistically associated with low pressure when departing CEOs speak more about their successors than their successes.

31% of CEOs are forced out or fired

When CEO departures are announced, exechange determines the Push-out Score on a scale of 0 to 10 to assess how likely it is that the chief executive was pushed out or felt pressure to leave the position.

Of the 322 CEO departures in the Russell 3000 Index evaluated over the past 12 months (November 30, 2021, to November 29, 2022), the average Push-out Score was 5.5, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When time with family, performance issues or personal reasons were cited as departure reasons, the average Push-out Scores were also significantly elevated.

Around 31% of the CEO departure events from the past 12 months received Push-out Scores of 8 or higher.

In other words, in the past 12 months, three in 10 departing CEOs were forced out, fired or stepped down under extreme pressure.

Pressure in the energy sector substantially below average

Some industries are under generally higher pressure than others, and CEOs are feeling the strain. In the past 12 months, the communication, consumer staples and health care sectors showed the highest average Push-out Scores. By contrast, pressure on CEOs was lowest in the real estate, industrials and financials sectors, as measured by average Push-out Scores.

In the energy sector, which includes Berry Corp., the average Push-out Score over the past 12 months was 4.8, which is substantially below the average.

Push-out Score for Trem Smith’s move determined

The Push-out Score regarding Trem Smith’s move is explained point by point in the exechange report.

exechange reached out to Berry and offered the company the opportunity to comment on the score.

Read the full story in the exechange report 49.2022 ($).