Duke Names CFO Good as Next Chief Executive Officer
Duke Energy Corp. (DUK) named Chief Financial Officer Lynn Good to be its next chief executive officer, replacing Jim Rogers who had agreed to retire as part of a settlement with regulators probing the company’s $17.8 billion Progress Energy acquisition.
“Our unanimous support of Lynn as our next president and CEO clearly demonstrates that the board is united in its vision for the company and its confidence that Lynn is the best leader to move Duke Energy forward,” board member Jim Hyler said in a statement today. Rogers has been chairman and CEO of Duke for seven years.
Rogers, 65, agreed in November to step down as head of the largest U.S. utility owner at the end of this year under a settlement with state regulators investigating a leadership change after Charlotte, North Carolina-based Duke’s purchase last year of Progress Energy. Hours after losing his role as CEO, Rogers was reinstated as head of the merged companies after a Duke-majority board voted to remove Progress’s Bill Johnson.
“This pretty much cements Duke control over the company,” Gregory Phelps, who manages $5 billion at Manulife Asset Management US LLC in Boston and owns Duke shares, said today in an interview. “I see Jim Rogers’s hand in this.”
Rogers didn’t participate in the selection process, Tom Williams, a Duke spokesman, said in a phone interview. A search committee comprised of four legacy Progress directors, four legacy Duke directors and John T. Herron, appointed March 1, voted to promote Good on June 12, he said.
Good, 54, is the first female to be named CEO of Duke, which began generating power for a South Carolina cotton mill in 1904, according to the company’s website. Duke will be the largest U.S. energy company and the sixth-largest company by market value on the Standard & Poor’s 500 Index to have a female CEO, after International Business Machines Corp., PepsiCo Inc. (PEP), Mondelez International Inc. (MDLZ), DuPont Co. and Hewlett-Packard Co. (HPQ)
Duke rose 0.9 percent to $68.23 at the close in New York. The shares have gained 6.9 percent this year.
Good will take over on July 1. She has been CFO since July 2009 and joined a Duke predecessor company in 2003 after working at Deloitte & Touche LLP and Arthur Andersen LLP.
“I’ll be more internally focused” than Rogers, who often speaks on national and international policy, Good said today in an phone interview. Work remains to win rate cases, finish some new plants, and complete the integration of Duke and Progress, she said today.
As CFO, Good told investors in November that slow growth in electricity use, 1 percent or less annually, may be the “new normal” for Duke. As a result, the utility owner will focus on cost cutting, she said.
Rogers will continue as chairman until the end of the year. The board plans to decide on a chairman-elect from among its independent directors in “the coming weeks,” and that person will take over as chairman on Jan. 1, the company said.
Rogers took over as CEO of Duke in 2006, after the company bought Ohio-based Cinergy, where he’d served for 11 years as chairman and CEO. Duke supplies power to about 7.2 million U.S. customers and owns utilities in six U.S. states. It also has power plants in seven Latin American countries.
The company opted in February to permanently shut the Crystal River nuclear power plant in Florida after deciding the risks and costs of fixing the reactor outweighed the benefits. Earlier this month, it began operations at the Edwardsport power plant in Indiana, a $3.2 billion coal-gasification project that was delayed and over-budget.
“It’s not a bad choice,” Julien Dumoulin-Smith, a New York-based analyst for UBS Securities LLC who rates Duke a buy and doesn’t own the stock, said today in phone interview. “Looking internally is always a favorable outcome.”
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