Duke Energy to pay $27 million, settling claims of covert ouster of Progress Energy CEO

Ex-Progress Energy CEO William Johnson heads the Tennessee Valley Authority.
Ex-Progress Energy CEO William Johnson heads the Tennessee Valley Authority.
Published Nov. 14, 2016

Duke Energy agreed to a $27 million settlement of claims that the power company's directors wrongfully concealed their plan to fire CEO William Johnson just minutes after Duke closed on its $13.7 billion merger in 2012 with Progress Energy Inc.

Progress Energy years earlier had acquired St. Petersburg-based Florida Progress, whose Florida Power utility served parts of Tampa Bay and west-central Florida. Duke Energy's purchase of Progress Energy provided the utility with its first access to the Florida market, now served by Duke Energy Florida.

At the time of the Duke-Progress merger, Progress Energy chief Johnson was supposed to become CEO of the combined company as part of the terms to buy Progress. Within hours of the deal closing in July 2012, the new Duke board met and fired Johnson. It then reinstated former Duke CEO James Rogers. Johnson, who held one of the briefest tenures in corporate history, left with a pre-negotiated $44 million severance package.

Shareholders soon sued Duke, claiming the decision to fire the CEO was reached months earlier, in May 2012, and hidden from the public, investors and regulators. Duke had attempted without success to have various lawsuits thrown out related to the Johnson ouster.

The settlement will be funded by insurance policies and is not an admission by Duke "of any liability or wrongdoing," according to a court document filed Nov. 9.

Since the original suit, Rogers has retired and works to bring electricity to developing parts of the world. Duke is now run by CEO Lynn Good.

And Johnson heads the Tennessee Valley Authority, a power company owned by the federal government. As a result, news reports say, Johnson is the highest paid employee in the federal government, making more than $6.4 million in 2015.