Ex-Progress CEO may get $44.7 million from Duke
Posted July 6, 2012 7:32 a.m. EDT
Updated July 6, 2012 10:55 a.m. EDT
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.