Just weeks before its planned IPO, the
New York Mercantile Exchange
has shaken its finance department.
, the parent company of the Nymex, announced late Tuesday that its chief financial officer has resigned from the commodities exchange. The exchange sys Jerome Bailey, 54, will continue on in an advisory role to the exchange through its initial public offering
Bailey, a former
Marsh & McClennan
executive, became its chief financial officer and chief operating officer in March, after replacing Kenneth Shifrin, the acting CFO at the time.
But in an odd twist, Shifrin, currently Nymex's senior vice president of finance, will get his old job back, succeeding Bailey as CFO.
NYMEX had little to say about the strange turn of events in the press release announcing Bailey's resignation. A Nymex spokeswoman declined to comment on Bailey's resignation.
It's unusual for a top executive of a company to step-down on the eve of an IPO. A high-level corporate shakeup is the kind of event that can rattle the nerves of would be investors. In leaving the Nymex before it sell shares, Bailey is foregoing the possibility of a cashing in his chips.
The registration statement for Nymex's upcoming initial public offering says: "in the event that we do not complete a private placement or the IPO of equity securities within one year of the commencement of his employment, Mr. Bailey will be entitled to terminate his employment with us and receive a one-time payment of $500,000."
There's no indication that Nymex is about to cancel the IPO. But there has been some speculation that the exchange could be a buyout target in the wake of last week's mega-deal between the
Chicago Mercantile Exchange
and the Chicago Board of Trade. The CME is paying $8 billion to acquire the
, the Chicago Board's parent company.
"There was no financial disagreements with him," says a Nymex member familiar with the matter. When he got brought on as a CFO, Bailey also took on the vacant role of COO. But the Nymex member said the two jobs proved to be too much.
"We thought that his learning curve would be shorter and it was not," according to a member familiar with the matter. Bailey could not be reached for comment.
As CFO and COO, Bailey currently receives a base salary of $500,000 per year and a minimum annual bonus of $500,000, the IPO filing says.
Nymex shareholders have already voted in favor of the IPO, in which shares were priced in a range between $48 and $52 a share. The exchange had previously said it expects the IPO to raise $250 million.