Backlash grows as Duke Energy scrambles to explain, soothe ousting of 'CEO-for-a-day' Johnson
Wake up and good morning. New details are emerging about the CEO coup at the newly merged Duke Energy-Progress Energy, where originally anointed chief Bill Johnson (who ran Progress Energy) was booted from the executive throne before he even had a chance to warm it.
According to news reports, Johnson is eligible to receive exit payments of as much as $44.4 million, despite his short-lived tenure. A July 5 dated Wall Street Journal story headlined Behind Duke's CEO-for-a-Day, Johnson signed his three-year employment contract to be CEO of the new Duke Energy on June 27 and resigned his post July 3. "One immediate consequence of the way the change was handled is Mr. Johnson's exit will cost Duke up to $1.5 million more than he would have received under the contract he had as Progress CEO," the Journal reports. Nice work if you can get it.
The story adds that Johnson was surprised by the outcome and had very little time to consider the terms of his exit package.
The story also notes the unorthodox flip-flop of CEOs -- Johnson ousted and former Duke CEO Jim Rogers stepping in to run the newly merged Duke Energy -- prompted Standard & Poor's to warn it could downgrade Duke's A-minus credit rating "due to a lack of clarity" about Johnson's departure at a time when "Duke faces considerable challenges integrating Progress Energy into its operations."
"Pressure is building on Duke Energy to explain why it ousted Bill Johnson as CEO this week," starts a story in today's Charlotte Observer. It seems former directors of Progress Energy are breaking the silence to "express outrage at what they term a calculated deception." And the North Carolina Utilities Commission, the same story reports, may investigate the Duke-Progress deal it just okayed to see is Duke lied about its intentions.
Remember, Duke just bought Progress Energy so it is Duke that now controls the power plants and the rates charged Floridians in its service territory in the Sunshine State.
The Charlotte Business Journal asks as good question: Rogers, 64, may be the new CEO but the newly merged company now lacks a successor and raises concerns about the stability of the senior management team.
This is a rough way to start the creation of the largest electricity provider in the United States. Is this the start of a growing backlash or will Duke be able to calm the anger over a poorly handled combination of two big companies?
-- Robert Trigaux, Business Columnist, Tampa Bay Times