CEO quits on day 1, gets $44 million for his troubles

[ProSense]

CEO quits on day 1, gets $44 million for his troubles

by Rolandz

Sometimes I think we've lost our capacity to be truly shocked anymore.

This story is emblematic of so much that is wrong in this country.

From Think Progress:

http://thinkprogress.org/economy/2012/07/06/512293/duke-energy-ceo-one-da/

Hours after new Duke Energy CEO Bill Johnson assumed his new position following the Duke/Progress Energy merger this week, he resigned his post. But Johnson can still qualify for up to $44.4 million for his time and effort

And they say government is wasteful! In fact, we're constantly being told that government could learn a thing or two about efficiency and financial restraint from business. That apparently means handing over gargantuan sums of money to people who walk in the door then walk right back out again.
The story continues:

Despite his short-lived tenure, Mr. Johnson will receive exit payments worth as much as $44.4 million, according to Duke. That includes $7.4 million in severance, a nearly $1.4 million cash bonus, a special lump-sum payment worth up to $1.5 million and accelerated vesting of his stock awards, according to a Duke regulatory filing Tuesday night. Mr. Johnson gets the lump-sum payment as long as he cooperates with Duke and doesn’t disparage his former employer, the filing said.

Under his exit package, Mr. Johnson also will receive approximately $30,000 to reimburse him for relocation expenses.

So as long as he plays nice with everyone he gets to keep the package. That seems an easy enough commitment to make for $44 million. I could learn to keep my mouth shut for that as well.

Here's another interesting statistic:

Grist calculates that Johnson’s pay package comes out to $5.5 million per hour, if he actually put in a full 8-hour day.

The "if he actually put in a full 8-hour day" is priceless.

- more -

http://www.dailykos.com/story/2012/07/07/1107160/-CEO-quits-on-day-1-gets-44-million-for-his-troubles

[warrior1]

1. It's Obama's fault. Sarcasm.

I think I'm going to be sick

[xtraxritical]

45. It was all worked out in advance so he would hand over the reins of power.

[n2doc]

2. Aww, he must have worked so hard for that

Much harder than the guy making min wage cleaning his private bathroom, for sure. So hard in fact that he will need a nice, long vacation to recover from the 24 hours of hell he must have gone through...

[99Forever]

3. And what will be done about it?????????

Well?

[Fumesucker]

4. The private sector is doing fine.

The Invisible Hand giveth, the Invisible Hand taketh away, all hail the Invisible Hand

[Skidmore]

5. Mitt's kind of job creation. Best example yet I've seen

of the hiring and firing practices of big money. We need an example of exactly this sort of thing associated with Mitt's big bidness experience and link the two.

[progressoid]

6. See? There's no recession.

[TreasonousBastard]

7. If you all could contain your outrage for a moment this is even stranger than it sounds...

Johnson, who was CEO of Progress, was promised the job running the newly merged Duke and Progress company and signed his contract a month or so before them merger was finalized.'

The day after the finalization, the board met in executive session and booted him out. There is much suspicion that this was the plan all along to get Progress to agree to the merger. NC AG and utilities board already have their noses deeply into this stinky deal.

Now, say what you want about CEO salaries and parachutes (Although I daresay none of us would turn any of the money down if we were good enough to be offered the job) this is not Johnson's fault or doing. A contract is a contract, and he made the deal in good faith. He was just given a fabulous fucking by the Duke contingent.

No, I don't really feel sorry for him, but he did get a raw deal after all is figured in.

[demwing]

9. You're wrong - I'd turn it down in a fucking heartbeat

I'd take a sane salary, and negotiate to have the remaining funds used for an employee bonus program, or to supply day care for working parents, or better healthcare, or any number of the other things that 40+ million bucks could buy.

[bluedigger]

18. He didn't get any raw deal.

Duke and Progress' customers got fucked because he took a back room deal.

[HughBeaumont]

38. And Progress's employees are going to get fucked due to this merger.

We, The People and It, The Economy are paying for legalized theft, and nobody cares and nobody does anything about it.

Amazing.

[Springslips]

27. Did he get a raw deal or . . .

Is this a legal front for a bribe?

[dixiegrrrrl]

29. I figured it was something like that

since i had heard of the merger.
fabulous fucking..maybe
fabulous payout for a fucking....indeed!

[Ruby the Liberal]

47. The fact that a utility has this kind of money

to even have the conversation makes me sick.

How many go without heat in the winter to give them enough margin to throw that kind of money around.

[Hissyspit]

48. Yup.

[CJCRANE]

8. Nice work if you can get it.

9.00am : "You're hired".
9.01am: "I quit".
9.02am: "My check for $44 million, please".

[whatchamacallit]

10. Sounds like cabinet position material

for either party.

[klook]

11. Corporate CEOs are America's royalty (n/t)

[bluedigger]

12. Do they need someone to run the shop tomorrow?

I'm willing to give it a day.

[obxhead]

13. Now you know why they had to increase those energy rates and

why they couldn't afford to trim those trees properly before the storm.

[leftyohiolib]

14. he must be a union thug to make so much money

[AnnieK401]

15. Suckers, I would have shown up and quit for half that!

[Brickbat]

16. How on earth will businesses ever get good talent if they can't pay for it? HUH?

[CanonRay]

17. Now there's a "well run" company

If I was a shareholder, I'd be sceaming bloody murder.

[former9thward]

19. The OP is completely wrong.

He did not quit or resign. He was thrown out by the Board of Directors. Two companies, Duke Energy and Progress Energy, merged and Johnson was supposed to be CEO. When the merger was completed the directors turned on him and fired him. Talk about getting the facts messed up!

http://online.wsj.com/article/SB10001424052702304141204577510573797464712.html?mod=WSJ_hp_LEFTWhatsNewsCollection

[ProSense]

20. Well,

"He did not quit or resign. He was thrown out by the Board of Directors."

...that certainly puts Duke Energy and $44 million dollar CEO contracts payable for nothing in perspective, huh?

[former9thward]

28. CEO compensation is out of control.

But I think a lot of compensation is out of control including athletes and movie stars. I don't have a good answer. It is hard to boycott a utility company.

[neeksgeek]

35. Boycotting Utilities...

Yes, very difficult. I am seriously considering the purchase of some solar panels ASAP. Of course, this would be easier if I was not a renter.

[DhhD]

40. Legislators deregulate electric Power. The people of a state can elect legislators that promise in

their campaign to re-regulate Power. Deregulation is a right wing frame of mind. So the public pays higher cost for electricity. That money goes to stock holders instead of going into Main Street. States with deregulated Power have high utility cost and lots of food banks, and other third world country equivalents. Texas is a good example.

[Lucky Luciano]

30. Much of it is from vesting stock over the years prior as CEO

Before the merger.

Very misleading.

[ProSense]

32. You know,

"Much of it is from vesting stock over the years prior as CEO"

...I'm sure there is justification for every CEO's compensation and executive parachute. It's highly likely the previous compensation was equally excessive.

[Lucky Luciano]

41. ...but surely not based on 24 hours of work as the headline says. nt

[Curmudgeoness]

44. OK, let's give him that...much of it was from prior vesting stock.

That still leaves "$7.4 million in severance, a nearly $1.4 million cash bonus, a special lump-sum payment worth up to $1.5 million...... and accelerated vesting of his stock awards."

So he was duped into the merger? So he thought that he would have a job? So he had prior stock options? So he was dumb enough to think that companies are fair and kind and will always treat people well? So he doesn't understand the corporate mentality?

How many here have had such a good deal when their company was merged? Anyone?

[Lucky Luciano]

49. Often times senior management will write clauses in the merger contracts that

protect them in the event of termination. Otherwise, they would never go for the merger.

[CJCRANE]

22. Nice work if you can get it.

9.00am: "Welcome to your new job".
9.01am: "You're fired!"
9.02am: "Here's your check for $44 million".

[ThoughtCriminal]

21. Remember - we don't call them CEOs anymore

The proper term in GOP NewSpeak Dictionary is "Job Creator"

How many jobs did he create that day?

[Smilo]

23. Well there was his replacement........

and..............................

[Initech]

24. Fucking thieves!!!! The whole lot of 'em!!!

[suffragette]

25. Interesting - this looks like one aspect of patterns at Duke that will gouge $$$$ from people

because in the end people will pay this through it being added to energy costs.

More energy and financial manipulation that costs citizens and benefits the uberwealthy .

Apparently Johnson was hired to get another company to merge with Duke, then ousted once that was accomplished. That nondisclosure requirement to get the payoff looks like an effective way to keep him from disclosing whatever he learned.

This clearly needs to be investigated throughly and if they've somehow managed to skirt regulations, then the regulations need to be strengthened.


http://online.wsj.com/article/SB10001424052702304141204577510573797464712.html

The surprise dethroning of Duke Energy Corp.'s chief executive set off angry responses Friday, with former directors at Progress Energy Inc. saying they never would have approved the $26 billion merger of the two utilities if they had known what would happen with the top job.

~~~

The merger closed Monday, creating a utility giant with former Progress CEO Bill Johnson at its helm. Hours later, the newly merged company's Duke-dominated board met for the first time and threw Mr. Johnson out of the job. It replaced him with Jim Rogers, who had run Duke before the deal and was slated to become the merged company's executive chairman

~~~

Mr. Rogers, who was attending an event at the Aspen Institute in Colorado Friday, didn't respond to messages left on his cellphone. Mr. Johnson, reached on his cellphone Friday, declined to comment. His severance package, which a spokesman said could be worth more than $44 million, includes a payment of up to $1.5 million, but only on condition he not disparage Duke.

~~~

One of his marquee projects—an Indiana coal-gasification project called Edwardsport—is close to $1 billion over budget. State regulators are holding hearings on the company's plan to pass on $2.6 billion of the $3.3 billion in costs to ratepayers. Duke has been accused of exerting improper influence over state regulators in an ethics scandal and several executives departed. The company hasn't admitted any wrongdoing.

[LiberalFighter]

51. Mitch Daniels and his henchmen probably have a hand in this too.

[Moonwalk]

26. Bookmark this thread, boys and girls, for the next time some Repuke tries to argue that...

...the president should have business experience, as those in business know best how to run this country. Show them this, and ask them to explain how those running companies who do this (oust a CEO after a merger and lose $44 million for less than a day's work in the process) are fit to run a country. ANY country.

[Tsiyu]

31. I'm not a lineperson for Duke working in the heat

Last edited Sat Jul 7, 2012, 02:03 PM - Edit history (1)

but I agree with all of the lineworkers who say: FUCK Johnson, FUCK Duke's "Pay Package," FUCK Duke and FUCK a system that makes this profane situation reality.

Now Johnsosn will become a lobbyist and hobnob with the millionaires in Congress and they'll all live like goddamned motherfucking useless pigs.

But we can't get a GODDAMNED $10/ hour minimum wage out of the same congress!!!!

[mercuryblues]

33. In feb of this year

Duke Energy was approved for a 7% rate hike.



http://www.heraldsun.com/view/full_story/17319347/article-Duke-Energy-rate-increase-approved-for-N-C--customers


DURHAM – A rate increase for Duke Energy Carolinas’ residential electricity customers in North Carolina will go into effect early next month, following an approval made Friday by the N.C. Utilities Commission.

An order from the commission, dated to Friday, said a rate increase in which no customer class will receive higher than a net total 7.21 percent increase on an annual basis is “just and reasonable to all parties.”

Duke Energy had initially filed an application for a rate increase in July, according to the order. In November, the utility agreed to a settlement with the public staff of the commission that stipulated a lower increase than what was initially requested. The public staff is an independent agency that makes recommendations about public utility rates and service on behalf of the public.


Read more: The Herald-Sun - Duke Energy rate increase approved for N C customers

[aint_no_life_nowhere]

34. Why can't this story become emblematic of real abuse in our system

the way the bogus "welfare queen" story became a major talking point for years as a symbol of abuse of the system? In his 1976 Presidential campaign, Ronald Reagan told a completely made-up story about a woman who had bilked the system of over $150,000.

"She has eighty names, thirty addresses, twelve Social Security cards and is collecting veteran's benefits on four non-existing deceased husbands. And she is collecting Social Security on her cards. She's got Medicaid, getting food stamps, and she is collecting welfare under each of her names. Her tax-free cash income is over $150,000."

Reagan never named the woman and no one was ever able to identify her. Nonetheless, she's all the Republicans were talking about for years to brand people on welfare, especially black people, as frauds and abusers. The CEO in this story is real. His compensation is real. Payment to him must come from somewhere, and can only be made up by passing the costs on to the consumer. If he puts his money into off-shore accounts, he's sheltering it from taxes and expecting fellow Americans to make up the difference.

[TreasonousBastard]

50. Very simply because...

too many people dream of becoming a wealthy CEO and forgive them their sins while too few dream of becoming a welfare queen.

It's as tough getting people to care about stories of corporate money gone wild as it is to get them to care about rock stars, movie actors and anyone with a good fastball making millions. Those people are living our dream and don't you dare mess with it.

[panader0]

52. You don't have to go to a rock concert

or a movie or a baseball/basketball/hockey game.
You do need electricity however.

[sulphurdunn]

36. Because he was fired

he won't be able to collect unemployment, and that just aint right.

[HughBeaumont]

37. Greatest. Economic. System. On. Earth.

Siiiiiiiiiiiiiiiiiiigh.

Dirty pool or not, a select few of us get a lottery for quitting after one day's "work"?

You GOTTA be shittin' me. How many people are getting fired to pay THIS out (from what I hear, LOTS)?

"Class Envy", my dick. This is legal THEFT and it's bullshit.

[Curmudgeoness]

39. And all I got was a kick in the ass!

Don't seem fair.

I would be really pissed if I was a stockholder in Duke Energy......and that is what I don't understand. Why are the stockholders in these companies not out to lynch someone?

[bluedigger]

42. Because they just pass the expense on to the consumer.

All they have to do is apply for a rate increase to the regulatory board, which is comprised of former "experts" in the industry, like this asshat.

[Tsiyu]

43. They don't suffer

They still get their dividend.

It's the worker for Duke who suffers, and the ratepayer who suffers.

Stockholders must NEVER suffer. That's why they're all thrilled to pay these obscene salaries, because they know the guys making these profane salaries will take care of the stockholder above all else.

Stockholders don't care if the workers are fired en masse or underpaid. They don't care if the customers are charged exorbitant rates. They don't even care if the company ends up folding.

As long as they get theirs and get out before it happens.

Greed, greed, greed. America runs on greed.

[Major Nikon]

46. Anyone who thinks government is more wasteful than the private sector is speaking from ignorance

A stint in government service is a feather in the cap of any young executive. There's a good reason why the private sector puts a high value on government experience. With the exception of agencies that serve the military, the entire government has to run extremely efficiently. Even in good times, no politician wants to increase funding to any non-military agency. More often than not, they are getting cut, and when they get cut they have to figure out new ways to complete their mission with less resources. That's why when private industry takes over a government service, the result is inevitably less service and/or higher costs. So government isn't less efficient. It's almost always more efficient.