Duke Energy Kicks Out New CEO After 20 Minutes, Pays Him $45 Million

Two weeks ago, regulators approved the merger of two utility companies, Duke Energy and Progress Energy, both based in North Carolina. The merger of smaller Progress with larger Duke created the largest electric utility in the United States. Progress Energy CEO Bill Johnson was approved as CEO of the merged company. It was all very corporate and mundane until the corporate intrigue started. Johnson was on the job for about twenty minutes before board members from the Duke side asked for his resignation, replacing him with Duke CEO Jim Rogers. Not that there’s any need to cry for Johnson: he’ll get $45 million for that twenty minutes of work, and for keeping his trap shut about why he was ousted.

One Progress board member wrote to the Wall Street Journal:

I do not believe that a single director of Progress would have voted for this transaction as structured with the knowledge that the CEO of Duke, Jim Rogers, would remain as the CEO of the combined company.

The switch attracted the attention of the North Carolina Attorney General as well as the North Carolina Utilities Commission. They want to know: who will pay for Johnson’s golden parachute? (Duke claims that investors, not customers, will pay) Who knew about the plan to ditch Johnson? Did Duke board members set out to deceive regulators, shareholders, and the Progress board?

NC hearing won’t resolve Duke Energy ‘quagmire’ over CEO switch [Business Journal]
Questions, outrage after Duke Energy’s CEO exits [LA Times]

Comments

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  1. YouDidWhatNow? says:

    …whatever it was that guy did for a living, I’m sure I’m at least 1/20th as good at it as he was. Therefore, I’ll work for 1/20th of that salary for you. No really, it’s OK…I can get along on that salary.

  2. NightSteel says:

    I’m in the wrong line of work. We all are.

  3. kmz says:

    Nice work, if you can get it.

  4. H3ion says:

    Is there a degree you can get in school that prepares you for this kind of job?

  5. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    I wonder what all the investors think about this, after all, if they’re paying out the $45 mil, won’t that come out of their dividends?

    • Alex d'Indiana says:

      Who cares about investors? They’re usually just pension funds, insurance companies, and municipal governments. The people who pay into them and the people who manage them are not themselves exceedingly rich, so who cares about their thoughts.

      • Coelacanth says:

        Let’s not forget mutual funds, which comprise many people’s 401(k)s. Then there’re the lot of individual retail investors who’ve been buying up Duke Energy for a variety of reasons (not to mention its 4.5% dividend yield).

        Investors should be protected, too… and ultimately, if the share price takes a dive, then chances are employees of the company are going to suffer. They may even have their own employee stock purchase plans or stock options, which would also be hit by paying out too much in executive compensation.

        $45 million for 20 minutes? Eh, that should be clawed back…

        Disclaimer: I have no direct position in DUK.

  6. TravistyRobertoson says:

    I think anything over 40 million is just ridiculous.

  7. SilverBlade2k says:

    Best Job ever.

    Work 20 minutes, get paid 45 million, retire.

    • wackydan says:

      Except that this is his payout for being CEO of Progress and losing his job the way he did… Contracts contracts….

      Your problem shouldn’t be with the the CEO, but with the board of directors of Progress Energy who wrote him this contractual golden parachute in the first place.

    • DemosCat says:

      20 minutes of work? He probably spent half that time sitting on the can playing Angry Birds.

  8. Abradax says:

    135 million dollars an hour?
    He can almost afford healthcare.

  9. evilpete says:

    There’s something missing to this story

  10. dirtleg says:

    This was obviously a high stress position which required a great deal of his 20 minutes be spent on things that we small minded folk would not understand. Where is the compassion? He is VIP! We are not capable of understanding, we are not educated! We just don’t get how the system works!

    Leave the VIP allllooooooone!!!

  11. cantiloon says:

    He worked for Progress, under different names since 1995 and became their CEO in 2007. With the merger, they couldn’t have two CEOs, so he was the one that got bumped. The amount of money he got is staggering, but getting a golden parachute for someone at that level of a large company is not.

    • cantiloon says:

      *is not uncommon. Ridiculous IMO, but not uncommon.

    • Mambru says:

      Would be cool to see a cage fight between CEO’s of merging companies, because there can be only one

    • Hartwig says:

      FTA – “I do not believe that a single director of Progress would have voted for this transaction as structured with the knowledge that the CEO of Duke, Jim Rogers, would remain as the CEO of the combined company.”

      It sounds like this wasn’t a simple one CEO had to go, they had decided on one CEO to fool board members and then once the merge occurred they fired him.

    • MarkFL says:

      Getting it in less time than it takes to have a pizza delivered is.

      Which conjures up an image:

      Pizza delivery guy: I have a pizza for Mr. Johnson.

      Receptionist: Sorry, he doesn’t work here anymore.

      Pizza guy: But he just placed the order 20 minutes ago!

      Receptionist: Excuse me, I have in incoming call…Duke Energy…yes, he’s here now…okay, I will. I have some bad news for you, young man…

  12. Hartwig says:

    Aren’t investors paid through customers money? I don’t see how the investors are paying for this, unless a couple are gonna fork over 45 million dollars. Sounds like a pretty shady merger, they really need to investigate.

  13. MarkFL says:

    From the board member: “I do not believe that a single director of Progress would have voted for this transaction as structured with the knowledge that the CEO of Duke, Jim Rogers, would remain as the CEO of the combined company.”

    Is he saying the board approved the transaction without knowing who the CEO would be? If so, they should all resign.

  14. MarkFL says:

    If you click on the link above to the LA Times article, there’s an amazing line from an analyst:

    “…the move risked enormous liability for Duke’s board — and that the board was unlikely to take that risk unless it considered the move legally defensible.

    “Based on that, he argues Duke stock could present a good opportunity for investors.”

    He can’t mean the same investors who Duke says will be liable for the $45 million, can he?