Friday, December 10, 2010

Duke Energy President Violates Ethics, Deposits an Extra $10 Million in the Bank

Duke Energy refused to pay me $3.75 million not to say anything bad about the company. So here goes.

James Turner resigned as president and chief operating officer of Duke's U.S. Franchised Electric and Gas business this week after The Indianapolis Star reported that he sent lots of e-mails this year to David Lott Hardy. Hardy at the time was head of the Indiana Utility Regulatory Commission. "The e-mails showed that Turner and Hardy joked and discussed personal topics, sometimes trading messages eight or 10 times a day." ($10M-plus+retirement+package)

Governor Mitch Daniels fired Hardy flat-out in October. Duke Energy paid Turner more than $10 million to quit this week. "Turner's severance package included $3.75 million in severance in the form of performance shares and stock grants. In addition, he will get to keep his retirement package of $6.7 million and will qualify for a bonus of more than $500,000. Duke spokesman Thomas C. Williams said the $3.75 million was in exchange for Turner agreeing to certain restrictions, such as not to work for a competitor for two years or to publish any disparaging remarks about the company."

I hope the utility watchdogs are having a feast. Thousands of Duke customers have power shut off and go cold in the winter because they can't afford to pay their bills. Those who pay late have to pay extra. Meanwhile, I'll bet Turner can even afford to keep his porch light on all night long.

Williams pointed out that Turner already was entitled to "the bulk of" the retirement package. What is the perception left then to Duke customers? This is a company that rewards unethical executives and gives a little extra to say nothing bad about the company.

I'm not naive enough not to understand how and why these big severance packages exist. Even college football and basketball coaches get paid millions to go away. My point is perception and sensitivity. If your organization has to make a decision that will be unpopular with its constituents (Who doesn't?), think about how that news will be received. What can be done to mitigate the downside? Perhaps nothing. But I wonder if Duke even tried. What if Turner had offered to donate a million or two to help customers keep the heat on this winter? If you can pay him to shut up, you can pay him to do the right thing for the company. Telling those living in the dark that Turner earned "the bulk of" his $10 million dollars is a slap in the face. Change the perception by showing some sensitivity, for crying out loud.

Okay, Duke. That will be $3.25 million in unmarked bills and I'll never mention you again.

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