Duke Energy Corp (DUK.N) has turned to an insider, Chief Financial Officer Lynn Good, to take over as chief executive when Jim Rogers steps down as part of a regulatory settlement linked to its $18 billion takeover of Progress Energy.
Good, 54, a veteran of the U.S. utility industry who is well known on Wall Street, was viewed by analysts as a leading contender for the job. Having served as CFO since July 2009, she is considered a strong manager with the experience to lead the large, complex company like Duke, the No.1 U.S. power producer.
"She's highly competent; she knows the ropes so there won't be a learning curve," Paul Patterson, an analyst at Glenrock Associates in New York, said on Tuesday after Duke's announcement.
Duke serves about 7.2 million electricity customers in six states in the U.S. Southeast and Midwest.
Rogers, 65, had been expected to step down as CEO when Duke's $18 billion takeover of Progress Energy closed last July, with Progress CEO William Johnson set to take the top job at the combined company. But Johnson was ousted by Duke's board of directors just hours after the deal closed.
Johnson's removal triggered anger in North Carolina, the merged company's largest market. Regulators, after reviewing the takeover proposal for months, felt slighted when Rogers unexpectedly took control. Subsequent hearings into the matter resulted in a settlement formalizing Rogers' exit.
Rogers will step down as CEO on July 1. He will continue as Duke chairman until his planned retirement December 31. The board will name one of its independent directors to assume the responsibilities of chairman as of January 1.
Unlike Rogers, who exhibited a high-profile among utility executives, Good said she will be "more internally focused," working to build momentum at the merged company and engaging with regulators and stakeholders in various states in which Duke operates.
"North Carolina is our largest jurisdiction and maintaining very positive relationships and working constructively with that commission will always be a priority," Good said.
Andrew Bischof, a utility company analyst at Morningstar in Chicago, said an external candidate would have better been able to repair Duke's relationship with North Carolina regulators.
Even so, Good's experience leaves her "well positioned to continue on the integration of Progress Energy," he said.
The company still faces a difficult regulatory climate in North Carolina, where it is working to raise customer rates, and in Florida, where it plans to decommission the crippled Crystal River nuclear plant.
Good joined Cinergy, a Duke Energy predecessor company, in 2003 after 20 years in senior management roles and as a partner for Deloitte & Touche and Arthur Andersen.
Under a new three-year employment contract, Good will earn a base salary of $1.2 million, with additional bonus targets that could increase her compensation to about $8.1 million a year, according to a regulatory filing.
Shares of Duke closed at $68.23, up 58 cents in New York Stock Exchange trading.
(Additional reporting by Swetha Gopinath in Bangalore; Editing by Sreejiraj Eluvangal,John Wallace, Marguerita Choy and Leslie Gevirtz)