Saturday, July 7, 2012
Did they really think?...(part 5)
Did they really think they were serving the best interests of Duke Energy Corp. and the Duke shareholders?
I'm talking about Duke's board of directors. On July 3 the board announced that William Johnson had resigned as CEO of Duke. Johnson will get a severance package worth an estimated $44 million. You might be tempted to say "that's revolting, but not that unusual, boards and CEOs seem to be piling on tens of millions in the pay packages every day of the week…."
But wait a minute: Johnson signed his three-year contract on June 27, less than a week before his departure. His contract was effective July 1, and he only "worked" one day. Let’s call it as it is: Johnson didn't resign, he was fired.
Formerly Johnson was CEO of Progress Energy Inc., which was acquired by Duke in a deal announced in January 2011. At that time it was announced that Johnson would take over as CEO of the new merged company. So the Duke board has had 18 months to get to know Johnson a little better, and it seems that they finally decided they didn't want him to be CEO.
For Duke shareholders, it’s been a tough week. On Monday July 2, the stock closed at $69.84. After the announcement about the Johnson debacle, the stock price has dropped more than 5 per cent this week, closing after hours on July 6 at $66.23. Standard & Poor's Ratings Services said it might cut Duke's credit rating in the wake of the funny business with who's running the show at Duke.
It's really not very funny.
Apparently the Duke directors thought they weren't doing anything wrong…..
Did they really think?.....(part 4)
Did they really think?.....(part 3)