Duke Energy could have given Bill Johnson at least enough time to warm the seat in his new corner office in Charlotte. Instead, the utility giant has chosen a path that will lead many to question its credibility, integrity and trustworthiness.
Early in my journalism career, a mentor told me that credibility is the most precious thing you can cultivate ... and destroy. "It is very easy to destroy your credibility," he would say. "It sometimes takes a lifetime to earn it back."
I expect the same can be said of Duke and CEO Jim Rogers, who has been recognized for his advocacy for Corporate America. Duke has a lot of explaining to do: to the Progress directors who voted for the merger, to shareholders who endorsed it and to regulators who (eventually) blessed it.
They aren't the only ones who want answers. Roy Cooper, the attorney general for North Carolina, is investigating the swerve, and the North Carolina Utilities Commission will question Rogers at a public hearing tomorrow. The lead director of Progress has already called foul, stating that the merger would have never taken place if this coup had been foreseen.
There is an interesting passage in the Wall Street Journal article. "The swap also undid what had been for Progress one of the central inducements to discussing and completing a deal. According to securities filings, Mr. Rogers told Mr. Johnson at their first meeting to discuss the merger in July 2010 that he would be willing to step aside as CEO, and Progress's board saw that concession as crucial."
Ouch. Sounds sneaky and deceptive to me. And now thousands of former Progress employees get to work for this guy? Good thing for Duke that the economy is behaving so poorly. Otherwise, there should be scores of resumes spread throughout Raleigh, where Progress was headquartered.
These types of coups are to be expected. You cannot expect two CEOs, along with the prerequisite egos, to share power. But you usually go through the dog and pony show of collaboration for six months to a year. To pull the trigger a mere 24 hours after the deal's completion makes a mockery of the approval process. It laughs in the face of transparency and disclosure.
What it says to me is that this deal should have never gone through. It screams out that people will have to keep a close eye on Duke for another five to 10 years at least. Regulators, that pressure falls on you. Someone in Raleigh ought to be calling Rogers weekly, and they should rev up oversight the minute he contradicts himself. No mulligans here.
Don't get me wrong. I'm not shedding any tears for Johnson, who reportedly walks away with a sweet $44 million exit package. Not bad pay for a day's work, but it also highlights the idiocy of these packages. Think about it ... Duke was willing to pay $44 million to close this deal and immediately put its CEO back in the corner office. That should make shareholders cringe.
The only cost savings I can see comes from interior design. I hope Johnson didn't renovate his new office. He sure didn't have enough time to enjoy it.
Still, the biggest cost is Duke's credibility. I wonder how long it will take for the company to get it back
Early in my journalism career, a mentor told me that credibility is the most precious thing you can cultivate ... and destroy. "It is very easy to destroy your credibility," he would say. "It sometimes takes a lifetime to earn it back."
| Duke CEO Rogers |
They aren't the only ones who want answers. Roy Cooper, the attorney general for North Carolina, is investigating the swerve, and the North Carolina Utilities Commission will question Rogers at a public hearing tomorrow. The lead director of Progress has already called foul, stating that the merger would have never taken place if this coup had been foreseen.
There is an interesting passage in the Wall Street Journal article. "The swap also undid what had been for Progress one of the central inducements to discussing and completing a deal. According to securities filings, Mr. Rogers told Mr. Johnson at their first meeting to discuss the merger in July 2010 that he would be willing to step aside as CEO, and Progress's board saw that concession as crucial."
Ouch. Sounds sneaky and deceptive to me. And now thousands of former Progress employees get to work for this guy? Good thing for Duke that the economy is behaving so poorly. Otherwise, there should be scores of resumes spread throughout Raleigh, where Progress was headquartered.
These types of coups are to be expected. You cannot expect two CEOs, along with the prerequisite egos, to share power. But you usually go through the dog and pony show of collaboration for six months to a year. To pull the trigger a mere 24 hours after the deal's completion makes a mockery of the approval process. It laughs in the face of transparency and disclosure.
What it says to me is that this deal should have never gone through. It screams out that people will have to keep a close eye on Duke for another five to 10 years at least. Regulators, that pressure falls on you. Someone in Raleigh ought to be calling Rogers weekly, and they should rev up oversight the minute he contradicts himself. No mulligans here.
Don't get me wrong. I'm not shedding any tears for Johnson, who reportedly walks away with a sweet $44 million exit package. Not bad pay for a day's work, but it also highlights the idiocy of these packages. Think about it ... Duke was willing to pay $44 million to close this deal and immediately put its CEO back in the corner office. That should make shareholders cringe.
The only cost savings I can see comes from interior design. I hope Johnson didn't renovate his new office. He sure didn't have enough time to enjoy it.
Still, the biggest cost is Duke's credibility. I wonder how long it will take for the company to get it back
