One of the most successful contractors of the last five years, CB&I, has terminated its chief executive and chief operating officer without an explanation, but several months after the company had begun an investigation into accounting for project costs and claim recognition.
CB&I announced Feb. 3 that its directors had terminated CEO Gerald E. Glenn, who was also chairman and president, and Robert B. Jordan, executive vice president and COO. The Woodlands, Texas-based engineering, procurement and construction firm, formerly known as Chicago Bridge & Iron, says that accounting irregularities came to light when a senior member of the firm’s accounting staff wrote a memo alleging improprieties. The alleged improprieties involve claim recognition on two projects and the assessment of costs to complete two projects, according to a company announcement in October.
The firm’s executive vice president and CFO, Richard E. Goodrich, had retired three weeks earlier. CB&I announced at that time that the accounting questions would be turned over to an independent audit committee for investigation
A spokesman for the company declined to comment. “We aren’t really saying anything more at this point and the investigation [of the accounting problems] is ongoing,” he says.
The same day as the announcement of the terminations, Washington, D.C.-based Attorney Stephen A. Best said that Glenn and Jordan, who are his clients, had been wrongfully terminated by CB&I. “Gerald Glenn and Bob Jordan are being targeted by a results-oriented process where the reputations of honest men have been unfairly called into question,” says Best in a statement. “These men have served this company faithfully for 17 years combined, and have repeatedly been denied an opportunity by the company to be fairly heard on these issues. These men are not going to hand over their good names for the sake of a misguided, biased and incomplete review.”
To replace Glenn, CB&I elected Executive Vice President Philip K. Asherman as president and CEO. The company also reached a stay bonus agreement with current Chief Accounting Officer Tommy Rhodes under which Rhodes will be paid $1.82 million to stay on until June 30, 2006.