2. Duke's Dumbness
That CEO coup down at Duke Energy (DUK) sure did make our heads spin. Heck, even during the Arab Spring the dictators didn't get overthrown that quickly. Unfortunately, this week's deposition about Progress Energy CEO Bill Johnson's unexpected dethroning only made us dizzier.
Duke's new CEO Jim Rogers told the North Carolina Utilities Commission Tuesday that he was shocked when the board informed him -- just minutes after the merger closed on July 2 mind you -- that they were dumping Johnson from the top job at the combined company and installing him instead. The regulatory board, which approves electricity rate increase requests, is investigating whether it was misled after approving the merger on June 29.If the regulator believes it was a victim of a bait-and-switch scheme by the energy providers, it could put the kibosh on the deal. Rogers, however, denies that was the case, and told the panel that neither he nor Johnson had a clue about the board's trickery. "Our board did not feel that his style was appropriate or transferrable to leadership of the combined company," said Rogers. "They felt his style was autocratic and discouraged different points of view." Really? An 'autocratic' CEO? Wow, we never knew such a species existed! We thought all CEOs were warm, fuzzy and democratic in their decision making. Well if that's the case then we can totally understand the board's decision to ditch a tyrant like Johnson before he gained too much power over people's power bills. Yeah right! Not that we don't believe you Jim, but why don't we hear it from the meanie's own mouth? Oh, that's right, Johnson's not talking, preferring to let his lawyer do it for him. "The fact that he is held in the highest regard by his peers in the utility industry and in the North Carolina business community speaks volumes about his leadership and business capabilities," said Johnson's attorney Wade Smith said in a statement. We disagree Wade. What really speaks volumes is the $45 million in severance that Johnson is being paid to silently slink off. Or, in other words, Duke's brass is doing exactly what a publicly overseen utility is not supposed to do: It's leaving its investors and customers totally in the dark.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV