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]