El Paso ( EP) continues to lose money -- and even a few executives -- as it heads toward reckoning day with its shareholders. The nation's largest pipeline operator, together with two other struggling energy companies, surprised no one by ending the first quarter of 2003 in the red. But the former trading giant took center stage Tuesday by coupling news of a big loss and earnings miss with plans to cut its senior executive staff by nearly half. It shares slipped 3%. Just months after booting longtime CEO William Wise, El Paso has now taken aim at its second-in-command. The Houston energy company is terminating Brent Austin, current president and operating chief, with no plans to replace him. Trailing only Wise and former Executive Vice President Ralph Eads -- who helped build El Paso's doomed trading operation -- Austin ranked as one of the highest-paid executives in El Paso's history. He collected $1.7 million in annual compensation before business soured in 2002, when his paycheck dropped some 50%. Instead of replacing Austin, El Paso plans to rely on interim CEO Ronald Kuehn and other remaining executives to take up the slack. In addition to Austin, two other El Paso executives -- division presidents Greg Jenkins and Clark Smith -- are leaving the company. Jenkins led El Paso's petroleum and liquid natural gas units, while Smith presided over the company's struggling trading division. El Paso is axing the executives as part of a sweeping effort to slash costs by $400 million -- nearly triple its original goal -- in 2003. "All of these senior executives have contributed greatly to El Paso," Kuehn said in a prepared statement Tuesday. But "we must change to address the issues facing the company and the current realities of the marketplace."
"Because El Paso's liquidity is significantly better now due to the completion of additional asset sales and several financings ... these types of losses should be mitigated in the future," the company said Tuesday. But the market wanted better. Shares of El Paso fell 5.6% to $7.23 at the open before climbing back to $7.49 as trading picked up.