has ended its five-month search for a turnaround CEO.
The troubled energy company revealed Wednesday that it has snagged a top executive from industry leader
to head its shrinking business. Bruce Williamson, former president and CEO of Duke Energy Global Markets, now carries identical titles at Dynegy.
"I accepted this position because I believe Dynegy can re-establish itself as an energy industry leader," Williamson said. "The steps the company has taken to improve its financial condition and restructure the business will serve as a solid beginning in our efforts to build a new Dynegy."
Williamson fills a permanent CEO slot left vacant since Chuck Watson, Dynegy's former chairman and CEO, departed last May under a cloud of controversy. Williamson also takes over as president, replacing Steve Bergstrom, an energy trading expert who resigned this month when Dynegy announced plans to shed its merchant energy business. Dynegy dropped a penny to 90 cents.
Williamson will lead a much leaner operation than the once-explosive giant steered by Watson. As part of a massive restructuring, Dynegy just laid out plans days ago to slash 780 people from a 5,400-member workforce that's suffered cutbacks already. The latest round of layoffs primarily targets Dynegy's corporate and trading staffs, as the company moves to decentralize its operations into four autonomous operating units.
Dynegy has lost most of its muscle since last year's bankruptcy of crosstown rival and onetime suitor
. Since then, energy traders have weathered an industrywide meltdown that's hit Dynegy -- accused of business and accounting shenanigans -- particularly hard. Dynegy barely escaped bankruptcy this summer, and its stock has recently plunged back below $1 a share.
The company is now throwing considerable faith behind its new CEO.
"Bruce has a proven track record of building and sustaining businesses throughout his career," said Dan Dienstbier, who's served as Dynegy's interim CEO the past several months. "His industry knowledge, financial acumen and broad experience ... will provide the company with capable leadership as it continues to rebuild."
The market shrugged off Williamson's arrival, pushing Dynegy's stock down a penny to 90 cents a share. But some observers expressed surprise at Dynegy's new hire.
"Why would anybody want to go to Dynegy?" one industry analyst asked bluntly.
Williamson, 43, has spent nearly two decades as an energy executive, including five years at Duke and another 14 at Royal Dutch/Shell Group. Duke is considered one of the strongest players in the flailing merchant energy sector. Even so, the company is far from problem-free.
The North Carolina energy giant is among many companies under regulatory scrutiny for possible wrongdoing by its energy trading unit. This week, a new audit only added to the company's troubles. A 35-page report, issued Tuesday by auditing firm Grant Thornton, revealed that Duke had understated regulated profits by $123 million between 1998 and 2000. The company must now pay a $25 million penalty to customers in the Carolinas and record a $19 million charge to fourth-quarter results.
Shares of Duke climbed 40 cents to $20.05 in Wednesday morning trading. They remain near the low end of their 52-week trading range of $16.42 to $40.45.