Business Briefs

Ex-Progress CEO may get $44.7 million from Duke

Posted July 6, 2012

Former Progress Energy Inc. Chief Executive Officer Bill Johnson, who unexpectedly resigned after Duke Energy Corp. completed its takeover of the company on Monday, may collect as much as $44.7 million after his exit.

The total compensation is four times what was reported initially about Johnson's severance filing based on a Securities and Exchange Commission filing Duke Energy made after Johnson's departure was disclosed Tuesday morning.

In further analysis of the filing and based on information from Tom Williams, a spokesman for Duke Energy, Bloomberg news breaks down Johnson's compensation as:

  • $12.7 million for pension benefits and deferred compensation
  • $14.3 million for vested stock awards
  • a possible $7.4 million payment for taxes and
  • as much as $10.3 million for severance, bonus and lump-sum payments

Meanwhile, speculation continues to swirl about why Johnson left after only a brief time in the role as CEO of the combined Duke Energy-Progress Energy. He was replaced by James Rogers, chairman and chief executive of Duke, who had been scheduled to become chairman of the combined utility.

The Wall Street Journal, citing unnamed sources, said the decision to replace Johnson as CEO came shortly after the merger closed Monday and its new 18-member board met. Eleven Duke appointees and seven from Progress, including Johnson, comprised the board.

"Messrs. Johnson and Rogers attended the meeting, but then left when the board went into executive session – the portion of the meeting without management. There, directors deliberated changing the two executives' roles. The board decided the initial arrangement wasn't going to work," the Journal said.

"Mr. Rogers' advocates viewed him as a consensus builder whose style was better suited to the task of bringing two firms together, one person said. He also had run the larger company. The board informed both men of its decision after the meeting and came to an agreement that Mr. Johnson would step down, people familiar with the matter said."

Duke’s $17.8 billion takeover of Progress, announced in January 2011, created the largest U.S. utility owner by market value.

Duke announced Johnson’s resignation as being a “mutual agreement.”

Standard & Poor’s Rating Services said July 3 it was placing Duke on negative credit watch after “the abrupt change in executive leadership.”

Johnson, 58, has been the chairman and CEO of Raleigh-based Progress since 2007. Under terms of the takeover, Johnson was supposed to become president and CEO of the combined companies. 

Johnson was entitled to some of the money under his retirement plan and other portions of it were tied to achievement of the company’s performance goals, Williams said in a phone interview today.

Johnson will get $12.7 million for his accrued and unpaid benefits under Progress Energy’s retirement and deferred compensation plans, according to a June 29 filing with the U.S. Securities and Exchange Commission.

He will receive as much as $14.3 million in accelerated vesting of his restricted and performance stock awards, according to regulatory filings. In addition, he may be eligible for a $7.4 million payment for excise and gross-up taxes, said Williams.


This story is closed for comments.

Oldest First
View all
  • scottmac Jul 10, 2012

    And all of our electric bills are going to skyrocket because of this merger. The gov't can say that the regulate whether they can raise rates, but the have no true control. This is how the meetings go on rate increases:

    Big Energy: we need to raise the rates by 5%
    Dumb NC Gov't: you can't do that with this economy. We will not approve.
    Big Energy: OK, we will layoff 10,000 NC workers because we need the money.
    Dumb NC Gov't: OK, we approve.

    Meanwhile, we are cutting a $44M check to someone that does not need the money. No matter what anyone says, the common people are going to feel it in the end, the rear end.

  • mwiggs2 Jul 6, 2012

    why must he receive such an exit package when our utility rates will increase to pay for this and for the merger?

  • jerryebrown Jul 6, 2012

    First, let me say from the very beginning, my comments are not directed at Mr. Johnson personally. I have no doubt he is a man of great integrity and intelligence. I do not find fault with he and his representatives negotiating the absolute best compensation and exit package. But am I the only one who just feels: Wow! That’s a lot of money for an executive of a utility company? Unfortunately, this is just a drop in the bucket compared to those on Wall Street. But people who invest in and play the market do so willing. Utility customers have no say, and no choice! How do these guys keep a straight face when they sit before the utilities commissions and request rate increases with salaries and compensation packages like this? Oh, wait the same way state universities increase tuition , when you have not only chancellors, vice-chancellors, deans, assistant deans making 6 and 7 figure salaries and haven’t seen the inside of a class room. Yeah I know, just don’t unde

  • justcommonsense Jul 6, 2012

    In case you all missed it, the layoffs were set to take place once the merger was completed. That's what happens every single time 2 companies merge. It's the way business has operated for decades. Do they always eliminate the jobs that should be ie redundant positions at the top... most likely not. But it is the way business works.

    I like many of you may not like the way things are fun or work....but really??? You want government to run every single thing in your life? I guess most haven't really payed attention all these many, many years... government cannot efficiently, or cost effectively run any kind of business. The more government intrudes into our lives, the more corruption there is.

  • tgiv Jul 6, 2012

    Mr. Johnson got his 30 pieces of silver. Whether that detracts from his previous role proselytizing for the community, I leave to your good judgment. You can try and clean this up any way you want, he was a conspirator in this mess and he took the money. Didn't even think of his employees.

  • ACC Fan 27520 Jul 6, 2012

    All this crying from people who are sitting in their air conditioned homes or offices, a computer plugged into the wall, and probably watching WRAL multitasking. Why don't you all get wind mills and solar panels so you can get off of the electric grid. oops I forgot you want power when it is dark, and when there is no wind. Do you realize that the rates in the southern states are as low as half of that in the north east, and in California. And to top that off this pulled off by a liberal leaning DEMOCRAT who is funding the Democratic convention this year. Ain't life Grand!!!

  • Ozzie Jul 6, 2012

    archmaker..... its hard to feel sorry for someone reportedly getting 40+ MILLION in serverance,etc. sorry... and I do have a very close knowledge of how it is to be unemployed...

  • corey3rd Jul 6, 2012

    How dare middle class employees expect pensions and healthcare when it's obvious that those at the top need all that money for their retirement fun and games.

  • Marty King Jul 6, 2012

    This is one of the problems with large corporations. The other problem is that they work too hard to look good to shareholders at the expense of employee morale and quality of service.

    This is a waste of money and we are all gonna pay for this with higher utility rates.

  • jgilchr Jul 6, 2012

    Lies and deceit out of greed is the corporate way. Anyone who thinks companies will do the right thing without regulations needs to think again. If you truly believe they will over stuffing their pockets I have a bridge I can sell you.