Key Takeaways
- Petrobras CEO Jean Paul Prates was reportedly pushed out by Brazil President Lula da Silva following a dispute over the payment of dividends.
- Prates had resisted efforts by government-chosen members of the board to withhold an extraordinary dividend payout.
- Lula has been pushing Petrobras to reduce the amount given to investors and use the money to boost job creation and economic activity in the country.
American Depositary Receipts (ADRs) of Petrobras (PBR) sank after the Brazilian government replaced the state-run oil giant’s CEO Jean Paul Prates.
The company announced in a press release that Prates would be stepping down after a meeting of the board to consider his “early termination.”
The Brazilian Ministry of Mines and Energy informed the company that Prates will be replaced by former energy regulator Magda Chambriard.
Petrobras’ Chief Financial and Investor Relations Officer Sergio Caetano Leite was also relieved of his duties, with Carlos Alberto Rechelo Neto appointed as interim CFO.
What’s Behind Petrobras’ Executive Shake-Up?
Prates was only at the helm since January 2023, and is the fourth CEO in as many years to be ousted. Brazil’s President, Luiz Inacio Lula da Silva, reportedly removed Prates following a dispute over dividends.
Prates and Lula clashed when the CEO refused earlier this year to go along with government-chosen board members who wanted to withhold a payment of extraordinary dividends.
Lula has been pushing for Petrobras to cut back on returning money to shareholders and instead use the cash to invest in areas that would create jobs and stimulate economic activity.
The news sent Petrobras ADRs into negative territory for the year.
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