Best Paying One-Day Job Ever

Photo: brokinhrt2 (Creative Commons)

Those who justify exorbitant levels of CEO pay as functional examples of how markets work will perhaps have a tough time explaining the strange case of Bill Johnson and the Duke Energy Corporation. Johnson signed a contract last week to become Duke’s chief executive upon closure July 2 of a merger with Progress Energy Inc. (which Johnson had previously led). The merger took effect on July 2, and Johnson resigned as CEO at 12:01 am on July 3. A company spokesman says the hasty (to say the least) departure was by “mutual agreement,” and nobody else is talking.

But what we do know is that a half a day’s employment can be very, very lucrative. Let’s just quote from the Wall Street Journal‘s account:

Despite his short-lived tenure, Mr. Johnson will receive exit payments worth as much as $44.4 million, according to Duke. That includes $7.4 million in severance, a nearly $1.4 million cash bonus, a special lump-sum payment worth up to $1.5 million and accelerated vesting of his stock awards, according to a Duke regulatory filing Tuesday night. Mr. Johnson gets the lump-sum payment as long as he cooperates with Duke and doesn’t disparage his former employer, the filing said. Under his exit package, Mr. Johnson also will receive approximately $30,000 to reimburse him for relocation expenses.

“As long as he doesn’t disparage his former employer.” That’s precious. Why on earth would he do that? Apologists for executive compensation like to argue that astronomical pay can’t be avoided “because if I don’t pay them, someone else will.” I look forward to their application of this theory to the strange case of Duke Energy and Mr. Johnson.