Duke Board Member Called Johnson ‘Threat’ Before Merger
Stock Chart for Duke Energy Corp (DUK)
A Duke Energy Corp. (DUK) board member raised concerns about Bill Johnson’s “arrogance” and said he was a “threat” to the company’s $17.8 billion takeover of Progress Energy Inc. before the deal was announced.
“There is a certain arrogance in his take it or leave it view of the deal with him as CEO or the deal is bad and they don’t do it!” Dan DiMicco, Duke board member and Chairman and Chief Executive Officer of steelmaker Nucor Corp. (NUE), wrote in a Nov. 21, 2010 e-mail. “I know I was the only one that really does see Bill as a threat” to the deal’s success.
DiMicco and the other board members voted 10-5 on July 2 to remove Progress CEO Johnson, who was supposed to lead the combined company under the Jan. 10, 2011 merger agreement. As the 18-month merger review dragged on, friction emerged between the companies, with Charlotte, North Carolina-based Duke blaming Progress for the departure of two female executives and Johnson suggesting he wasn’t getting messages from the board.
The North Carolina Utilities Commission and state attorney general are investigating the surprise decision to replace Johnson with Duke Chairman and CEO Jim Rogers hours after the deal closed on July 2. Duke supplied the e-mails today as part of hundreds of pages of documents responding to a July 12 order from state regulators and a request from the attorney general.
Rogers and Lead Director Ann Maynard Gray last month testified to the commission that the board lost confidence in Johnson as CEO in part because of his leadership style. Johnson told the commission he was fired after Duke had “buyer’s remorse” about the deal and sought to abandon it.
Joyce Fitzpatrick, a spokeswoman for Johnson, didn’t immediately return a phone call seeking comment on the Duke documents.
Rogers told Gray in a May 15 e-mail that two female executives, Gianna Manes and Catherine E. Heigel, left Duke “after disheartening conversations with their new bosses from Progress.”
Both women “expressed deep concern about whether they would be valued in the new organization,” Rogers wrote.
The departure of Manes “suggests some concerns we talked about at meeting,” William Barnet III, another board member, said in a March 1 e-mail to Rogers and Gray.
In an April 29 e-mail to Gray, Rogers asked the board to meet with Johnson the following week. “He apparently didn’t think I was truly carrying messages from the board,” Rogers wrote.
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