For some


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executives -- particularly those blamed for corporate disasters -- reckoning day could be near.

Paul Anderson, who abruptly replaced Richard Priory on Nov. 1, is nearly two weeks into his job as Duke's turnaround CEO. Right now, Anderson is still meeting with senior managers to determine just how badly the company has deteriorated since he left as president five years ago to rebuild Australia's BHP. But Wall Street has already predicted that Anderson will quickly follow up by axing some of those same people.

"In our view, Duke is about five years late in appointing Mr. Anderson as CEO," wrote Prudential analyst Carol Coale, who has a neutral rating on Duke's stock. "We believe that more changes will occur at the management level as Mr. Anderson pursues his strategy, potentially resulting in a change in culture at the corporate and management levels. This could be a good thing."

Coale is among a number of analysts who seem hopeful that Anderson will, in fact, pull out the broom and start cleaning house soon. So far, Wall Street isn't necessarily pointing Anderson toward any specific corners of the executive suite. But then, Anderson -- an executive perhaps best known for his ability to clean up companies -- can certainly spot dirt on his own.

Duke inched up 4 cents to $17.45 on Wednesday.


Just hours after Duke named him future CEO, Anderson fielded a pointed question from the media.

What did Anderson plan to do about Duke's current president -- and Anderson's former right-hand man at PanEnergy -- Fred Fowler? Anderson never really answered. But Fowler has indicated that he would like to stay put.

Still, at least one Wall Street analyst hinted that Fowler may have wanted more.

"It's not clear if Mr. Fowler was extended an offer to lead Duke or whether he turned it down if such an offer was made," J.P. Morgan analyst Jim von Riesemann wrote last month. But "we thought the leading candidate to replace Mr. Priory was ... Fowler." Duke didn't immediately return a call seeking comment.

Taking a Shot
Duke over five years

Anderson himself moved on the last time he was pining to be CEO. The former PanEnergy leader agreed to become mere president when his company merged with Duke in 1997. But he lasted just two short years at the post.

"Once you've been the No. 1 guy at a company," Anderson candidly admitted to reporters last month, "it's hard to relegate yourself to No. 2 for very long."

Whatever happens, Fowler seems to have more staying power than one of his well-placed colleagues down the hall. Indeed, some people believe that CFO Robert Brace already has one foot out the door. And they're convinced that he may not be traveling alone.

Dangerous Duo

By now,


detailed Brace's dismal track record at length.

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In a nutshell, Brace came to Duke in late 2000 after being run off as finance director of the U.K.'s largest telephone company. With Brace controlling the checkbook,

British Telecom


managed to rack up huge sums of debt as it evolved from a regulated monopoly to a far-flung competitive empire. When British Telecom finally got rid of him, its stock price actually spiked, but its balance sheet was already in tatters. In the end, Brace left behind a far different -- and weaker -- company than he had joined.

Some people look at Duke and see a repeat of that story. But if Brace ultimately leaves the company, he could have someone at his side. Controller Keith Butler, the CFO's No. 2 man, has some black marks by his name as well.

Last year, in fact, Duke's own employees rated the corporate finance department -- officially led by Brace -- as stronger than the controller's office.

"Overall, finance employees scored more positively in all categories (except one), when compared to all employees surveyed," the internal study found. "However, corporate controller department employees rated significantly below most employees in eight of the 15 categories."

Butler's department scored particularly weak satisfaction rates -- below 50% -- in the areas of task support/resources, empowerment and skills and information.

Although Butler has tapped some high-profile talent, including two senior managers from Arthur Andersen, he continues to lead what some insiders view as a chaotic department. By now, some people have grown convinced that Butler was never really up to being controller at all.

Prior to his selection for that post in 2001, Butler spent two years in a nonfinance position at a small Duke subsidiary. He was operating chief of DukeSolutions, a money-losing division known for such novelties as converting chicken waste into electricity. Hurt by a lack of business, the department pared away staff until it was sold outright -- at a loss -- when Duke began shedding "noncore" businesses last year.

Interestingly, Butler spent the largest chunk of his career in what has since become Duke's most embattled business. After five years in the corporate controller's department, Butler worked for nearly a decade in the unregulated Duke Energy North America, or DENA, division. He was in fact CFO of that department before he left for DukeSolutions and then circled back to the controller's office -- which he now controls -- two years ago.

Past Brass

Since then, DENA has gone on to replace some of its tarnished brass.

In a big shakeout last year, Duke shed both Harvey Padewer -- who once raked in millions as group president of wholesale operations -- and DENA CEO Jim Donnell. The company then tapped Robert Ladd, one of its own insiders, to run the struggling unit.

To be sure, Ladd was no stranger to challenges. He last served as CEO of Duke's troubled merchant-finance division, which the company began dismantling shortly after his transfer. He has since led DENA through a horrendous period that's left some people wishing that division would disappear as well.

In a recent "to-do list" for Duke's new CEO, Merrill Lynch analyst Steven Fleishman called for a new strategy for DENA at least. And new strategies, some people remind, often require new leadership.

Going forward, the shake-up could actually spread into Duke's stronger units as well. In fact, it already has. Duke's core utility business has lost a number of senior executives in the wake of a big accounting probe that's now criminal in nature.

Duke Power, the largest electric utility in the Carolinas, stands accused of underreporting profits to state regulators who can hike rates when a utility exceeds its "allowed return." But several top power executives who may have been involved in the scandal are already gone.

Bill Coley retired as Duke Power president early this year. Jeffrey Boyer, who served as corporate controller when the accounting games allegedly took place, left Duke Power a few months afterward. And Don Stratton, a vice president whose damaging comments may have hurt Duke's case, stopped answering his office telephone months ago.

Rick Ealey, a Duke Power finance executive who made some troubling statements of his own, has reportedly left the company as well. Meanwhile, two other Duke Power executives -- Sandra Meyer and Steve Young -- have been mentioned as possible future targets.

In the end, most agree, major changes are coming. And von Riesemann, for one, suspects that executive housecleaning is just one item on Anderson's list.

"We believe a condition of Mr. Anderson's employment," he wrote, "was a certain level of carte blanche to right the listing Duke ship."