8-K: Carriage Services CFO Resigns, Interim Replacement Appointed

Carriage Services, Inc. announces the resignation of its Chief Financial Officer, L. Kian Granmayeh, effective July 1, 2024, and the appointment of Kathryn Shanley as interim CFO.

Summary

• L. Kian Granmayeh has resigned from his position as Executive Vice President, Chief Financial Officer, and Treasurer of Carriage Services, Inc., effective July 1, 2024.
• His resignation is not due to any disagreements with the company's operations, policies, or practices.
• Carriage Services has engaged an executive search firm to find a permanent replacement for the CFO position.
• A separation agreement has been reached with Mr. Granmayeh, including a one-time payment, continued salary for 12 months, and consultant payments for six months.
• Kathryn Shanley, the current Chief Accounting Officer, has been appointed as interim Principal Financial Officer, effective June 6, 2024.
• Ms. Shanley will serve in this role until a permanent CFO is identified.
• Ms. Shanley has extensive experience at Service Corporation International (SCI) prior to joining Carriage Services.

Sentiment

Score: 6

Explanation: The news is neutral to slightly negative due to the CFO's departure, but the company has a plan in place to manage the transition. The separation agreement is comprehensive and the interim CFO is experienced.

Positives

• The company has a clear plan to find a permanent CFO by engaging an executive search firm.
• The appointment of an experienced interim CFO in Kathryn Shanley ensures continuity in financial leadership.
• The separation agreement with Mr. Granmayeh is comprehensive and includes non-compete and non-disparagement clauses.
• The company is providing continued salary and consultant fees to Mr. Granmayeh to ensure a smooth transition.

Negatives

• The resignation of the CFO creates uncertainty in the company's financial leadership.
• The company will incur additional costs related to the separation agreement and the search for a new CFO.
• The company will be paying $20,000 per month for six months for consultant services from the former CFO.

Risks

• The transition to a new CFO could disrupt the company's financial operations and strategic planning.
• There is a risk that the search for a permanent CFO may take longer than expected.
• The company may face challenges in maintaining financial stability during the leadership transition.
• The company may face challenges in maintaining the same level of financial expertise during the transition.

Future Outlook

The company is actively searching for a permanent CFO to execute its long-term strategic growth plan.

Management Comments

• Mr. Granmayeh's resignation is not the result of any disagreement with the Company or its Board of Directors.
• The Company has engaged an executive search firm to help identify a Chief Financial Officer with the financial sophistication necessary to help drive and execute on the Company's long-term strategic growth plan.

Industry Context

The death care industry is relatively stable, but leadership changes can impact investor confidence. The appointment of an interim CFO with experience in the industry should help to mitigate any negative impact.

Comparison to Industry Standards

• Service Corporation International (SCI), where Kathryn Shanley previously worked, is a major player in the death care industry, providing a benchmark for financial operations.
• The separation agreement terms, including non-compete and non-disparagement clauses, are standard practice in executive departures within the industry.
• The use of an executive search firm to find a new CFO is a common practice for companies of this size and complexity.

Management Changes

Stakeholder Impact

• Shareholders may experience short-term uncertainty due to the CFO transition.
• Employees may be impacted by the change in leadership.
• Customers and suppliers are unlikely to be directly impacted by this change.

Next Steps

• The company will continue its search for a permanent Chief Financial Officer.
• Kathryn Shanley will serve as interim CFO while the search is underway.
• The company will continue to execute its long-term strategic growth plan.

Key Dates

Keywords

CFO, resignation, interim CFO, executive search, separation agreement, financial officer, Carriage Services, Kathryn Shanley, L. Kian Granmayeh, leadership change