Emails on Duke Energy merger reveal outrage

Emails on Duke Energy merger reveal outrage

Credit: Charlotte Observer

Former Progress Energy CEO Bill Johnson.

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by BRUCE HENDERSON / Charlotte Observer

WCNC.com

Posted on November 6, 2012 at 11:11 AM

Updated Tuesday, Nov 6 at 12:17 PM

CHARLOTTE, N.C. -- A flurry of emails among former Progress Energy directors, released on Monday, registers shock and outrage over the ouster of former Progress chief Bill Johnson after the company’s July 2 merger with Duke Energy.

The 2,195 pages of documents were filed with the N.C. Utilities Commission, which is investigating Johnson’s exit.

Duke, under commission orders, also filed nearly 2,000 pages of previously confidential documents, but those had not been posted on the commission’s website late Monday. Duke also asked the commission to let an additional 443 pages stay out of public view.

Former Progress director Marie McKee, now on Duke’s board, signaled unease in an email to Johnson three days before he lost his job. Duke board members later blamed Johnson’s management style, in part, for his exit hours after the merger closed.

“Maybe I am being overly cautious but there are a lot of people in the (board) room with a variety of control needs as all of this comes together,” she wrote.

“We have had trouble penetrating the board process so far – talk about control needs – and have about as much insight as you do,” Johnson replied.

On July 2, after the new Duke board fired Johnson, McKee and fellow Progress directors tried to arrange a conference call to discuss what had happened.

“I am shocked and very concerned about the long term prospects and have a lot of personal (soul) searching to do tonight,” she wrote.

The next morning, Johnson wrote McKee, who is president of the Corning Museum of Glass in New York state, and presumably other Progress directors.

“I was quite shocked by this turn of events and by the rationale,” he wrote. “I had seen most of the Duke directors only one time in the last year, and seen the lead director twice; none … related to my management or leadership behavior, and none were remarkable. But when you are a CEO or executive, you always know this time might come and that the employment agreement you signed gives the Board the complete right to fire you for any or no reason at all.”

Days later, reinstalled Duke CEO Jim Rogers wrote McKee, who is now compensation chairman of Duke’s board. Duke was working with lawyers for former Progress executives John McArthur, Mark Mulhern and Paula Sims, who resigned after Johnson’s dismissal, to resolve compensation issues.

McKee and four other Progress directors remain on the new Duke board. Two others, John Baker II and Theresa Stone, resigned.

Under commission orders, Duke and Progress directors filed more than 5,000 pages of emails and other documents in August, but marked most of them confidential. The companies said those pages contained trade secrets that could help competitors.

In October the commission, responding to public records requests by the Observer and other media companies, ordered that 4,361 pages be made public record, some with redactions.

Duke delivered the documents by Monday’s deadline, but they had not appeared on the commission’s website by the end of the business day. Commission staff said they hope to post the documents Tuesday.

The utilities commission, Duke argued, didn’t apply the same definition of “trade secrets” that N.C. courts use.

Duke listed a number of categories of documents it said the commission wrongly failed to label as trade secrets. Among them are documents containing financial analysis, directors’ requests for information from management, nuclear operating information, and discussions of the company’s strategic direction.

The company claimed a range of other errors by the commission, including its release of documents containing personnel information and “inconsistent rulings” on confidentiality.

Duke also contended 199 of the 2,700 pages former Progress directors filed, separately from Duke and by their own attorneys, should be confidential.

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