Ousted Progress CEO: Duke Had 'Buyer's Remorse'
Fri August 24, 2012
Ousted Progress CEO: Duke Had 'Buyer's Remorse' About Merger
Ousted CEO Bill Johnson says Duke Energy leaders had "buyer's remorse" about the merger with Progress Energy and that's what led to his abrupt firing.
Johnson gave state utility regulators a version of events that differed starkly from testimony given by Duke CEO Jim Rogers last week
Johnson got a new tie for his first day as CEO of the nation's largest utility company.
"My wife rarely buys me a new tie - this was a special day," Johnson told North Carolina Utilities Commissioners in a day-long hearing. "It ended in a way that was a surprise."
Such a surprise that when the lead director of the new Duke Energy board asked to meet with him just hours after the merger was complete, Johnson thought she wanted to congratulate him in person - not fire him.
"I opened my mouth to ask a question and she said 'There's no reason to discuss any of the board deliberations or anything else, it's your leadership style,'" said Johnson. "We'd like your resignation by 7 a.m. when the announcement of this decision will be made."
Last week, Duke CEO Jim Rogers - the man the board chose instead of Johnson - testified to state regulators about the abrupt leadership change, he called Johnson's leadership style "autocratic."
Johnson said he found that "a little interesting."
Johnson says for most of the last six months he had no interaction with Duke employees and the Duke board refused to even meet with him ... so he's not sure how they could find him "autocratic."
"If I was the autocratic, closed-minded person I've been painted to be, you'd think that the Progress people would have been happy to see me deposed. Right?" said Johnson. "If that's the way I treated those people for my 20 years there, they should have been happy to see me go. That doesn't seem to be the reaction."
He's referring to the many letters Progress Energy employees and board members have sent regulators praising Johnson as honest, kind and effective.
A website even popped up this week where nearly two dozen Progress employees have posted odes to their former CEO.
Johnson does admit things had become pretty frosty between him and Jim Rogers in recent months.
He traced that back to an interview Rogers did with a newspaper, the gist of which Johnson describes as "I sold the company cheap, so I could be the CEO."
"This was quite disrespectful," says Johnson. "My board was furious. I was furious."
Progress Energy's former lead director said much the same thing recently about the price of the merger. But Johnson says it's absolutely not true. He says it was Duke's idea to do the merger and make him CEO.
"I think it comes down to this," says Johnson. "They wanted the merger. Then they didn't want it. Then they couldn't get out of it. Then they didn't want to be stuck with me as the person who dragged them to it."
When federal regulators made it clear last December the companies would have to make hundreds of millions of dollars in concessions to get the merger approved, Johnson says Duke Energy got cold feet. Word got back to him that Rogers and other top Duke officials were going around to Wall Street analysts telling them the deal was unlikely to happen and that it would be better for Duke if it didn't.
One of those analysts published something to that effect in April.
"This is like dropping an atomic bomb on your deal," says Johnson. "There's a lot of hard feelings about this."
Duke Energy couldn't just call the whole thing off because if it did, it would have to pay Progress Energy $675 million as a fine - that was a clause in the merger agreement. And Johnson says he had no interest in letting Duke off the hook.
"You know I helped design this merger because I thought it was the right idea - I still think that," says Johnson. "I was entirely focused on getting the merger done."
It'll be good for shareholders and customers, he says.
Now, Duke CEO Jim Rogers last week told commissioners that he and the Duke board were dead-set on making the merger happen for those same reasons. That's actually why he said the board justified not telling regulators about their concerns with Johnson: they didn't want to do anything that might endanger the merger.
It's all starting to sound kind of "he said, he said," and Duke Energy's attorney saw it coming. Right at the start of the meeting yesterday, he jumped up to argue that he should be able to cross-examine Johnson - but Utilities Commission Chairman Ed Finley swatted him down.
"You do not have the right to cross-examine. Please sit down," says Finley, tersely.
State utilities commissioners are not happy with Duke Energy. They feel they were misled and are trying to decide if the deceit warrants a punishment for what is now the nation's largest utility.
Today they'll see if they can pry any new details about the CEO switcharoo out of two Duke Energy directors who engineered Johnson's ouster.