- After less than two years in the position
- Praise and thanks for Cutt
- John Reinhart taking over
- Cutt will remain as Chairman at Gulfport Energy
- Cutt said 76 words
(exechange) — Oklahoma City, Oklahoma, January 19, 2023 — Tim Cutt, chief executive of Gulfport Energy, leaves his position. As announced by Gulfport Energy Corp. in a news release and in a regulatory filing published on Thursday, January 19, 2023, Timothy J. (Tim) Cutt leaves his post as chief executive officer at the natural gas-weighted exploration and production company, after less than two years in the role, effective January 24, 2023.
The average tenure of CEOs who announced their departure over the past 12 months was 8.4 years. Around 12% of CEOs left their posts within two 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.
Tim Cutt’s duties as CEO will be taken over by John Reinhart, most recently President and Chief Executive Officer at Montage Resources Corporation.
The fact that Tim Cutt’s successor is brought in from outside suggests that the board may seek to stimulate change with fresh ideas and new initiatives.
In general, an outsider does not have the constraints of an insider when it comes to leading painful changes or making unpopular decisions.
“Time of great opportunity”
Gulfport Energy did not give an explicit reason for Tim Cutt’s departure from the CEO post. Cutt stated: “John has a proven track record of instilling a culture anchored on driving operational excellence, accountability, transparency and safety and he will bring strong leadership during this time of great opportunity for our Company.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (27% of cases), implementation of a planned succession (16.1%) and the statement that the time was right for a change (8.8%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (5.9% of cases), personal reasons (2.9%) and conduct issues (2.1%). Rather rarely stated reasons are career change (2.1% of cases), health problems (1.8%), death (0.9%), the desire for more time with family (0.6%) and disagreement (0.6%). Sometimes, more than one reason was given. In 31.4% of cases, no reason was given.
Cutt will remain as Chairman at Gulfport Energy
Gulfport Energy stated: “Gulfport Energy Corporation (NYSE: GPOR) today named John Reinhart President, Chief Executive Officer and Director, effective January 24, 2023. Tim Cutt, who has served as Chief Executive Officer and Chairman since 2021, will retain his position of Chairman of the Board of Directors. ”
Gulfport Energy said: “Mr. Reinhart will succeed Timothy Cutt, who resigned as Chief Executive Officer of the Company, effective as of the Effective Date, and was appointed as Executive Chairman of the Company, effective as of the Effective Date [January 24, 2023].”
Generally, resignations are seen as formally voluntary departures. Still, CEOs may also be pressured to resign. In fact, 78% of the time “resign” was used in CEO departure announcements over the past 12 months, the departing chief executive received a Push-out Score above the critical threshold of 5, indicating elevated pressure.
Share price increase since January 2022
The announcement follows an increase in Gulfport Energy Corp.’s share price of 4% since January 2022.
In the position of CEO since 2021
Tim Cutt became CEO of the Company in 2021.
Cutt joined Gulfport as the Interim Chief Executive Officer in May 2021 and assumed the role of Chief Executive Officer in September 2021.
Cutt is a Petroleum Engineer with 39 years of energy experience.
He served as Chief Executive Officer and as a director of QEP Resources from January 2019 to March 2021.
Prior to joining QEP, Cutt was the Chief Executive Officer and a director of Cobalt International Energy from 2016 to 2018.
Previously, Cutt held several executive positions with BHP Billiton before serving as President of the Petroleum Division from 2013 to 2016.
During this time, he was also a member of BHP Billiton’s Corporate Leadership Team.
Cutt began his career with Mobil and worked for ExxonMobil for 24 years and served in various management roles including President of ExxonMobil de Venezuela, President ExxonMobil Canada Energy and President Hibernia Management & Development Company.
Cutt joined the board of the American Exploration and Production Council in May 2021 and previously served as a board member of the American Petroleum Institute from 2013 to 2018.
Cutt received his Bachelor of Science Degree in Petroleum Engineering from Louisiana Tech University.
76 words by Tim Cutt
In the news release announcing his departure as CEO of Gulfport Energy Corp., Tim Cutt received praise and thanks.
In announcing the leadership change, Tim Cutt said 76 words.
“Build on the momentum”
Tim Cutt stated: “I am pleased to welcome John to Gulfport. John has a proven track record of instilling a culture anchored on driving operational excellence, accountability, transparency and safety and he will bring strong leadership during this time of great opportunity for our Company. The Board and I look forward to working with John and the management team to build on the momentum we have created and continue establishing Gulfport as an attractive investment opportunity in our sector.”
Over the past 12 months, 25% 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 108 words. The longest statement was 382 words. The shortest statement was 23 words. Leadership transitions in which departing CEOs provide conspicuously short, excessively long or no explanations for their move are statistically associated with elevated pressure and show an increased incidence of Push-out Scores above the critical threshold of 5.
34% 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, with 0 being most likely a voluntary move and 10 being most likely a forced exit. Anything over a 5 indicates that there are valid reasons to believe an executive may have been pushed out.
Of the 341 CEO departures in the Russell 3000 Index evaluated over the past 12 months (January 19, 2022, to January 18, 2023), the average Push-out Score was 5.7, 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 other opportunities were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 34% 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, one in three departing CEOs were forced out or fired.
Pressure in the energy sector somewhat above the critical threshold
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, financials and utilities sectors, as measured by average Push-out Scores.
In the energy sector, which includes Gulfport Energy Corp., the average Push-out Score over the past 12 months was 5.3, which is somewhat above the critical threshold of 5.
Push-out Score for Tim Cutt’s move determined
The Push-out Score regarding Tim Cutt’s move is explained point by point in the exechange report.
exechange reached out to Gulfport Energy and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 4.2023 ($).