If you are a shareholder of Duke Energy who does not approve of the company’s failure to disclose its plan to remove Bill Johnson as CEO and then issue to him a payout of approximately $45 million, please contact us to provide an evaluation of your rights.
Duke Energy Corporation recently merged with Progress Energy, Inc. to form the largest electric utility company in the United States. Prior to the merger, Progress Energy CEO Bill Johnson was approved to become CEO of the newly merged company. However, in an unusual development, Johnson held this position for about twenty minutes until board members asked for his resignation and replaced him with prior Duke CEO Jim Rogers. Moreover, Johnson was awarded a payout of approximately $45 million in conjunction with his resignation after his ever so brief stay at the helm as CEO of the newly merged company.
In response to these recent events, one Duke Energy shareholder recently filed a derivative case in the Court of Chancery of the State of Delaware. The lawsuit alleges that the eleven members of the Duke Energy Board of Directors breached their fiduciary duties of loyalty and care in failing to disclose they intended to remove Johnson and then pay him approximately $45 million. The lawsuit alleges that several weeks prior to the closing of the merger, the Duke Board of Directors had already decided that upon completion of the merger, Johnson would be fired, and Rogers would be reinstalled as CEO of the post merger company. According to the lawsuit, the Board of Directors kept their plan to shuffle CEO’s secret from shareholders of both companies and several regulatory entities, whose approval of the merger was required.
Regulatory authorities have acted quickly to investigate the CEO switch and payout. The North Carolina Utilities Commission stated it had been mislead and has since been conducting public hearings. Former CEO Johnson also recently testified before the North Carolina Utilities Commission about the sequence of events. Johnson told regulators he was surprised at the turn of events. Also in the aftermath, one former Progress Board Member sent a letter to the Wall Street Journal in which the Board Member stated “I do not believe 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 CEO of the combined company.”
If you are a shareholder of Duke Energy and question the actions of the Duke Energy Board of Directors in removing CEO Johnson only to pay him approximately $45 million, please click on the “contact us” page on our website to discuss this matter with an attorney from our firm.