What with Fourth of July falling on a Wednesday, and a heat wave that zapped the brain cells of those of us who did go to work, this week made a fine time for publicly-traded companies to file regulatory documents to a minimum raised eyebrows.
Footnoted, as usual, was all over the ensuing document dump, highlighting Ralph Lauren’s 40 percent pay raise and Activision Blizzard co-chairman Brian G. Kelly’s sweet change of control clause, which would pay the executive at least $15 million if the company changes hands. (Not so unlikely with Vivendi shopping its 61 percent stake.)
But the filing that took the cake belonged to Duke Energy, the gas and electric company that closed its merger with Progress Energy on July 2. Per the terms of that deal, Progress CEO Bill Johnson was slated to lead the merged company, and indeed, Mr. Johnson signed an employment contract with Duke on June 27. On July 2, however Mr. Johnson was out, and Jim Rogers, who’d led Duke until the merger closed, was back in.
Here’s how the company explains it in documents filed after markets closed on July 3, in what Matt Levine would like to suggest is the greatest 8-K ever (emphasis ours):
On July 3, 2012, Duke Energy announced that Mr. Johnson has resigned from all of his positions at Duke Energy and will no longer serve as President and Chief Executive Officer of Duke Energy or as a member of Duke Energy’s Board of Directors (the “Duke Energy Board”), effective as of 12:01 a.m. on July 3, 2012 (the “Effective Date”). Also, on July 2, 2012, the Board reappointed Mr. James E. Rogers as President and Chief Executive Officer of Duke Energy, effective as of 12:01 a.m. on July 3, 2012, in addition to his role as Chairman of the Board. Mr. Rogers previously served as President and Chief Executive Officer of Duke Energy from the date of its merger with Cinergy Corp. in 2006 until the closing of Duke Energy’s merger with Progress Energy on July 2, 2012.
Which is to say that Mr. Johnson held the job of Duke Energy CEO for, what, less than a day? A fact that didn’t sit well with John H. Mullin III, a former Progress Energy director who argued that his board wouldn’t have approved the merger had it known Mr. Rogers would hold the reins of the joined company, and who made his feelings crystal clear in a letter to The Wall Street Journal:
In my opinion this is the most blatant example of corporate deceit that I have witnessed during a long career on Wall Street and as a director of ten publicly traded companies and as a former Trustee of Putnam’s numerous mutual funds.
As a non-continuing director of the combined company I now, along with similarly situated former directors of Progress, find myself without a constituency and without an ability to mount a challenge to what I believe is one of the greatest corporate hijackings in US business history.
For his part, Mr. Johnson will walk away with parting gifts worth $44.4 million, including up to an extra $1.5 million as long as he doesn’t disparage his short-time employer. Which is another tidbit you wouldn’t mind disclosing on the evening before a national holiday.