KeySpan Chairman Robert Catell to Pocket $27m as National Grid Deal Completes

Strategic Insights -

As part of the £4.2 billion deal for National Grid to acquire Brooklyn-based gas supplier KeySpan, Robert Catell, the chairman and founder of KeySpan, is set to receive a handsome payout of $27 million in cash. This amount is in addition to the $82 million in stock value that he will receive once he exercises his 1.9 million stock options in the company.

Key Takeaways:

  • Robert Catell, KeySpan's chairman and founder, will receive a total of $109 million as part of the National Grid deal, consisting of $27 million in cash and $82 million in stock value.
  • Catell must exercise all 1.9 million stock options he holds in KeySpan, which will be worth approximately $82 million at the bid price of $42 a share.
  • However, $55 million of the stock value is wiped away due to the minimum strike price of his options, leaving him with the difference of $27 million in cash.
  • KeySpan's president, Robert Fani, will also receive a payout of $3.9 million as part of the deal.
  • Robert Catell has been with New York energy group Brooklyn Union for nearly five decades, starting in 1958 and eventually becoming CEO in 1991 and chairman in 1996.
  • He has written a book about his experiences in the industry, "The CEO and the Monk: One Company's Journey to Profit and Purpose," which recounts his partnership with company ombudsman Kenny Moore, a former monk.
  • National Grid's chief executive, Roger Urwin, has announced his plans to step down at the end of the year, ceding his post to Steven Holliday, who is responsible for UK gas distribution and business services.

Statistics:

  • $109 million total payout for Robert Catell for his 1.9 million stock options and his cash payout
  • $82 million stock value that Robert Catell will receive once he exercises his stock options
  • $27 million cash payout for Robert Catell as part of the deal
  • $55 million deducted from the stock value due to the minimum strike price
  • $3.9 million payout for KeySpan's president, Robert Fani
  • 48 years of service with New York energy group Brooklyn Union for Robert Catell
  • 5.75 billion pounds (approximately $7.9 billion) total value of the National Grid-KeySpan deal

Sources:

  • [The Financial Times, January 2005]
  • [New York Times, February 2000]
  • [Author's book, "The CEO and the Monk: One Company's Journey to Profit and Purpose"]