Duke Doles Out Big Check to Ex-CEO

Duke DUK relaxed its purse strings last year.

The giant energy company found money for executive bonuses, even after posting a massive $1.3 billion loss. As promised, however, it did pay turnaround CEO Paul Anderson entirely in stock.

But the company, which paid no bonuses during a profitable 2002, generously rewarded its former CEO. Richard Priory picked up a $4.83 million severance package on top of nearly $2.3 million in salary and bonuses. He collected a handsome bonus despite the company's money-losing year.

"Based upon 2003 [earnings-per-share] performance, which was below the threshold level, and cash-flow performance, which was above the maximum performance level, Mr. Priory received a payment of $1,090,011, representing 100% of his target opportunity," Duke's proxy statement explains. The company says he got his whole cash-flow bonus but none of his EPS-based bonus.

Priory enjoyed other perks as well. He's entitled to $65,000 for any legal fees resulting from his separation agreement. And he will continue to have access to office space and secretarial help, both at Duke's expense, until he takes another full-time job or the company decides to halt such benefits altogether.

Duke offered smaller packages for two other former executives. It gave ousted CFO Robert Brace $700,000 in severance, $10,000 for legal fees and desktop and laptop computers stripped of confidential company information. Brace also collected nearly $1 million in salary and bonuses last year.

Richard Blackburn, who recently resigned from his post as legal counsel, has so far collected $644,406 in severance pay. According to the proxy, however, Blackburn is pursuing legal action that could bring twice that amount in additional severance. He earned $850,000 in regular pay last year.

Meanwhile, Duke President Fred Fowler picked up $1.27 million in cash and bonuses. Duke Vice President Richard Osborne earned $945,000. And Duke Power President Ruth Shaw collected $723,000.