When Duke Energy bought out Progress Energy on Monday, it formed a utility company of colossal proportions, which will provide power to more than 7 million Americans. And a whopping company means a whopping CEO compensation package -- even if that CEO is no longer the CEO. Bill Johnson resigned after just hours at the helm of the new firm, reports The Wall Street Journal, and walked away with a severance package that could be worth up to $44.4 million.
Johnson had been the CEO of Progress Energy, and 18 months ago, it was announced that as soon as the merger closed, he would become the new CEO of the largest electric company in the country. But just after midnight Monday night, Johnson stepped down "by mutual agreement" with the board, according to the Associated Press, which handed the reins of the $32 billion company back to former Duke Energy CEO Jim Rogers.
The new Duke board, which is two-thirds old Duke directors, made the decision after an executive session in which they came to the conclusion that Rogers, who had run the larger company, and was more of a "consensus builder," according to WSJ, was better-suited to the job.
A source close to the situation told WSJ that Johnson was surprised by the switcheroo, and had actually rented a house in Charlotte, N.C., where the new company is headquartered, although he hadn't yet moved in.
The shady maneuver outraged former Progress Energy board members like Alfred Tollison Jr., who told AP that the plan must have been secretly in the works for months.
"I do not believe that a single director of Progress would have voted for this transaction as structured with the knowledge that the CEO of Duke, Jim Rogers, would remain as the CEO of the combined company," former board member John Mullin III told WSJ.
"In my opinion this is the most blatant example of corporate deceit that I have witnessed during a long career on Wall Street," he continued in a letter shared with The News & Observer, "and as a director of ten publicly traded companies and as a former Trustee of Putnam's numerous mutual funds."
The move also befuddled The North Carolina Utilities Commission, which approved the merger last week with the understanding that Johnson would have the corner office. Its now considering an investigation. Standard & Poor's Financial Services has also warned Duke its become suspicious of its stability, and has placed the company on a watch list for a credit downgrade.
Duke spokesman Tom Williams told AP that the company looks forward to resolving these concerns.
And Johnson's hefty parting gift has upset pretty much everyone who has heard about it. He'll receive a $7.4 million severance, an almost $1.4 million cash bonus, a special lump-sum of up to $1.5 million, for the $10.3 million total that was earlier reported by various media outlets. In addition, he's getting an accelerated vesting of stock awards that could boost his total payout up to $44.4 million, according to Duke, and reported by WSJ. In just a few days, Johnson grossed more than the average American would earn in 27 lifetimes. And, of course, Duke will reimburse Johnson for his relocation expenses, which add up to $30,000 -- just slightly above the average income of a working American.