Progress emails detail panic as CEO Johnson was being fired

Johnson’s firing shocks Progress members on merged Duke board

jmurawski@newsobserver.comNovember 5, 2012 

The emails read like frantic 911 calls.

Duke Energy had just finalized its $32 billion merger with Progress Energy this summer when Duke’s 10 board members unexpectedly moved to oust their new CEO, Bill Johnson, who had led Progress.

Five dissident directors, who had joined Duke’s board from Progress just that day, began firing off emails in a desperate attempt to set up an emergency conference call between far-flung corporate directors who were participating in the board meeting by phone from the beach and the Dominican Republic. One board member was on a safari in Botswana.

The July 2 emails between the five legacy Progress board members reveal panic and disbelief as they struggled to set up an international conference call.

Helpless without support staff, the five colleagues exchanged emails for nearly six hours, not giving up until nearly midnight.

Outnumbered, they were powerless to prevent a boardroom coup that would reinstate Duke CEO Jim Rogers at the head of what was now the nation’s largest electric utility.

The emails, disclosed Monday to the N.C. Utilities Commission, were released by Duke as part of an ongoing state investigation into Johnson’s abrupt dismissal.

More than 1,800 pages of internal communications capture snippets of electronic conversation between the five board members from Raleigh-based Progress in the heat of the tense board meeting.

Two ex-Progress board members would later resign. Another Progress director, Fred Tollison, who did not join Charlotte-based Duke’s board, emailed the others to say he sold off his entire portfolio of Duke stock in disgust.

Several thousand more pages of documents are expected to be filed Tuesday.

Duke had previously submitted the records under seal as trade secrets, but the Utilities Commission, in response to media requests, ordered the power company to unseal the documents.

The virtual paper trail shows that the morning after the firing, on July 3, an emotionally spent Johnson emailed E. Marie McKee, a former Progress director who had joined Duke’s board as part of the merger.

Johnson had been up all night with his lawyer preparing his severance agreement to meet a 7 a.m. deadline to resign, set by Duke’s directors.

“I have a tangle of thoughts and emotions and wonder what I could have done to avert this situation – I certainly never expected it,” Johnson typed.

“But now, as an unemployed man for the first time in more than three decades, I think I will go to the Beach.”

The emails between the five ex-Progress board members are first recorded at 5:17 p.m. on July 2, less than an hour into the board meeting at which Johnson was fired by a vote of 10-5.

In the first message, Carlos Saladrigas calmly suggested: “Shall we get on a private call among ourselves?”

“Yes, how do we do this,” responded McKee.

The five exchange phone numbers while fumbling to get a conference call going.

“I am trying .... my apologies ....” McKee typed. “I usually don’t do the conf. call ... all support staff gone. Have been working to find someone...”

By 6:33 p.m., director James Hyler Jr. suggested the group try again the next morning.

“May be best anyway,” Hyler wrote. “I know I’m pretty worked up and would be less emotional in the morning.”

McKee agreed.

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

But no one had any luck creating a pass code for the next day’s call.

“I’m in the DR with limited options,” Saladrigas wrote. “What alternatives do we have?”

Saladrigas proposed using a free Internet service, telling the others he had just signed up and it worked. Others couldn’t log on.

As night settled, the mood darkened.

“I’m really struggling with all this,” Hyler wrote at 11:28 p.m.

“We definitely are all struggling,” McKee responded.

Early the next day the former Progress board members awoke to the full brunt of their powerlessness on the new Duke board.

They were humiliated to learn about Duke Energy’s morning press conference – announcing Johnson’s resignation and Rogers’ reinstatement – from The Charlotte Observer.

“I read the same thing!” McKee typed. “Amazing. No one said a word!”

Murawski: 919-829-8932

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