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pedestal and hasten the resurrection of the dead." - William Lloyd Garrison
Cinergy Employees Being SqueezedEmployee Advocate – www.DukeEmployees.com – February 16, 2006
Cinergy employees said that they have two IBEW locals, 1393 and 1347. Only members of 1393 have their benefits guaranteed for five years after the merger. The contract of 1347 expires April 1. It so happens that Duke Energy is shooting for a merger date of April 1.
Cinergy has already started trying to squeeze the benefits of Local 1347 members, in new contract negotiations, according to Cinergy employees and www.ibew1347.com.
Cinergy has multiple unions because the company was formed as the result of other companies merging.
Suit Claims Duke Energy Pension Changes Hurt EmployeesEmployee Advocate – www.DukeEmployees.com – February 13, 2006
This is the Associated Press’s version of the Duke Energy pension lawsuit story, as published by The Herald-Sun on February 9, 2006:
CHARLOTTE, N.C. -- Six former and current Duke Energy employees claim the company committed age discrimination and violated pension laws when it made changes to its retirement plan in the 1990s, according to a lawsuit filed this week in federal court.
The suit claims "older workers lost thousands of dollars in the value of their pensions after putting in decades of work" for the company.
The plaintiffs said they filed the suit after failing to reach accord with the Charlotte-based company. The lawsuit, which seeks class-action status and could add plaintiffs, also wants an overhaul of the company's retirement plan that includes oversight by a third party, along with unspecified monetary damages for lost benefits and interest.
"We feel the pension conversion was done properly," Duke spokesman Randy Wheeless said Wednesday. "We are reviewing the lawsuit right now, and we'll be prepared to address it at the proper time."
The lawsuit, filed in South Carolina, resembles a landmark discrimination and pension suit against IBM in which IBM in 2004 agreed to pay $300 million to thousands of older workers.
North Carolinian Henry Miller, a Duke employee and one of the plaintiffs, had accrued pension benefits of $258,000 under the old plan. The complaint says under the new plan his opening account balance was $129,000.
The U.S. Department of Labor requires that changes to pension plans "cannot reduce benefits that participants have already earned."
The Duke suit comes when several major companies, including IBM, Verizon, and Sears, have announced they are freezing pension plans.
With people living longer, traditional pension plan costs have been skyrocketing. Employers have said other retirement vehicles such as employee-funded 401(k) plans provide a way to better predict and manage benefit costs.
Duke Workers Claim Unfairness in Changes to Pension PlansCompany says conversion to new system done properly
Employee Advocate – www.DukeEmployees.com – February 12, 2006
This article by David Dykes was published in The Greenville News on February 11, 2006.
Six former and current Duke Energy Corp. employees, including a Seneca resident, claim the company committed age discrimination and violated pension laws when it made changes to its retirement plan in the 1990s, according to a lawsuit filed in federal court.
The lawsuit, which seeks class-action status and could affect thousands of Duke employees, wants a court-ordered overhaul of the company's retirement plan and an independent auditor to review the plan. It also seeks unspecified restitution for lost benefits and interest.
The lawsuit claims "older workers lost thousands of dollars in the value of their pensions, after putting in decades of work" for the Charlotte-based company when it converted its traditional pension to a cash-balance plan.
"We believe that the conversion of the pension plan was done properly," Duke spokesman Randy Wheeless said Friday. "We are still looking at the lawsuit, reviewing it, but we will be ready to address it as the suit moves forward."
The plaintiffs filed the lawsuit in U.S. District Court in South Carolina after they exhausted their available administrative remedies and the company's final denial of their appeals, said James Gilreath, a Greenville attorney involved in the case.
The plaintiffs include Kenneth Walton George, a Seneca resident who worked at Duke's Oconee nuclear facility, according to court records. He joined Duke in 1970 and took early retirement in December 2003, the court records show.
Another plaintiff is identified as Dennis Reed Bowen of Clover. He joined Duke in 1972 and took early retirement in November 2003 after working at Duke's Catawba nuclear facility, court records show.
Two of the other plaintiffs have taken early retirement from Duke, while two still work for the company. All four live in North Carolina.
According to the lawsuit, the plaintiffs are seeking damages and injunctive relief under a pair of federal laws, including the Employment Retirement Income Security Act and the Age Discrimination in Employment Act.
They allege in the lawsuit Duke violated both when it converted from a traditional, defined-benefit plan, which offers workers fixed benefits based on the number of years they worked, to a cash-balance plan, in which employees' benefits grow by a percentage of their pay plus interest each year.
But there is no guaranteed payout under the cash-balance plan.
With people living longer, traditional pension plan costs have been skyrocketing. Employers have said other retirement vehicles, such as employee-funded 401(k) plans, provide a way to better predict and manage benefit costs.
But Duke's conversion in 1997 to a cash-balance plan "made drastic changes" in how benefits were calculated, resulting in reduced balances for participants, the lawsuit said. The changes also disproportionately affected participants older than 40, it said.
Under the company's traditional pension plan, a substantial amount of pension benefit accruals were to occur in the latter years of employees' careers as they approached retirement age.
According to the lawsuit, Duke promoted that feature of the old plan to encourage its employees to remain loyal to the company and "not look for job opportunities with other employers."
The conversion, the plaintiffs said, trapped employees in "wearaway," in which their cash balances would take years to move ahead of their pension benefits, which were frozen under the old plan.
And since age was factored into the calculation, older employees received less in interest credits than younger workers, the plaintiffs said.
In one example, Henry Miller, a Duke employee from North Carolina and one of the plaintiffs, had accrued pension benefits of $258,000 under the old plan, according to the lawsuit. It said that under the new plan, his opening account balance was $129,000.
Cash-balance conversions "left older workers stranded, too old to start their careers over again, and having to defer plans for early retirement, because their expected lump sum benefit had been slashed," the lawsuit said.
George and another of the plaintiffs exhausted their administrative remedies under the age-discrimination act and in November obtained 90-day right-to-sue letters from the Equal Employment Opportunity Commission, according to the lawsuit.
Those letters, the lawsuit said, were related to claims filed with that agency.
Do NOT Take Severance Package Before Reading ThisEmployee Advocate – www.DukeEmployees.com – February 10, 2006
The law firm of Wallace and Graham has negotiated a change in the severance benefit package waiver that will benefit Duke Energy employees. The change will protect your right to bring any work related claim for any past or future injury or disease that you may have suffered as a result of your employment.
This sentence should appear in the waiver on page 2, paragraph 5:
“This Waiver and Release does not waive rights and claims that may arise after the date I sign this form, nor any pending or future claim to workers compensation benefits.”
Ensure your waiver has the above statement. If not, write it in. Wallace and Graham has a letter from Duke Energy which authorizes the inclusion of the statement in the waiver.
The added language will allow you to file a future claim, should you develop any asbestos disease, cancer, or other injury or illness from exposures or working conditions on the job.
Duke Energy Pension Suit Seeks Class-Action StatusEmployee Advocate – www.DukeEmployees.com – February 10, 2006
This article by Mike Drummond was published in The Charlotte Observer on February 9, 2006. It is the expanded version of an article posted on Charlotte.com. on February 8, 2006.
Duke Sued Over Pension
Duke Energy committed age discrimination and violated pension laws when it changed its retirement plan in the late 1990s, six former and current employees allege in a lawsuit filed this week.
Duke "made drastic changes" to its pension plan about nine years ago and "older workers lost thousands of dollars in the value of their pensions after putting in decades of work" for the company, the suit contends.
The lawsuit seeks class-action status, an overhaul of the company's retirement plan with oversight by a third party, and unspecified monetary damages for lost benefits and interest. The plaintiffs said they tried but failed to reach accord with the company.
The lawsuit, filed in federal district court in South Carolina, echoes a landmark discrimination and pension suit against IBM a few years ago. IBM lost that case and in 2004 agreed to pay $300 million to thousands of older workers.
"We feel the pension conversion was done properly," Duke spokesman Randy Wheeless said Wednesday. "We are reviewing the lawsuit right now, and we'll be prepared to address it at the proper time."
Hundreds of current and former Duke employees who participated in the company's retirement plan could be part of the class action.
James Gilreath of the Gilreath Law Firm in Greenville, S.C., and lead lawyer for plaintiffs in the Duke case said, "I can assure you, it ain't a trivial lawsuit."
One of the plaintiffs in the Duke lawsuit, Henry Miller, an N.C. resident who's still employed with the company, had accrued pension benefits of $258,000 under the old plan.
The day after the new plan went into effect, his opening account balance was $129,000, the complaint says.
Changes to pension plans "cannot reduce benefits that participants have already earned," according to the U.S. Department of Labor.
The filing comes at a time when more companies -- including IBM, Verizon, Hewlett-Packard, Motorola and Sears -- recently have announced they are freezing pension plans. Traditional pension plan costs are skyrocketing as people live longer. Employers say killing pensions in favor of other retirement vehicles such as employee-funded 401(k) plans is a way to better predict and manage benefits costs.
Like the IBM case, the Duke suit specifically alleges that the company's cash balance plan unfairly harmed older workers, in violation of the Employee Retirement Income Security Act and the Age Discrimination in Employment Act.
Duke changed from a traditional pension plan to a cash balance plan in 1997.
Traditional pensions multiply years of service by average salary, producing a benefit that escalates in value in later years.
When companies change to cash balance plans, they freeze the pension. Future retirement benefits then grow only by small annual increments based on a worker's pay. The older the worker, generally the smaller the pay increment.
In some cases, older employees have seen their retirement income drop by 50 percent under cash balance plans.
Cash balance plans mushroomed in the 1990s. About 19 percent of the largest 1,000 U.S. companies had such plans by 1999, according to one government report.
The Internal Revenue Service imposed a moratorium on new cash balance plans in 1999 amid uncertainty over the effect on workers. But the U.S. Department of Labor now has a set of strict rules under which companies can institute the plans.
Duke Sued Over Pension PlanEmployee Advocate – www.DukeEmployees.com – February 10, 2006
This article was published by the Charlotte Business Journal on Thursday, February 09, 2006:
Some current and former employees have filed a lawsuit against Duke Energy Corp., alleging the company violated pension laws when it changed its retirement plan several years ago.
The lawsuit, filed in federal court in South Carolina, is seeking class-action status, changes to the retirement plan and unspecified monetary damages.
Charlotte-based Duke Energy (NYSE:DUK) switched from a traditional pension plan to a cash-balance plan in 1997.
Traditional pensions take into account the number of years of service to a company, which benefits veteran workers.
Under a cash-balance plan, retirement benefits are based on an employee's salary and grow more slowly.
The lawsuit contends Duke's cash-balance plan harmed older workers in violation of federal laws.
"We feel the pension conversion was done properly," says Duke spokesman Randy Wheeless. "We are reviewing the lawsuit right now, and we'll be prepared to address it at the proper time."
Duke Energy Age Discrimination LawsuitEmployee Advocate – www.DukeEmployees.com – February 9, 2006
This article was posted on The Charlotte Observer website, Charlotte.com, on February 8, 2006. It was written by Mike Drummond:
Duke hit with age discrimination suit
Duke Energy committed age discrimination and violated federal pension laws when it altered its benefits plan, a group of former and current employees allege in a lawsuit filed Monday.
The lawsuit, filed in federal District Court in South Carolina, echoes a landmark discrimination and pension suit against IBM a few years ago. IBM lost that case and in 2004 agreed to pay $300 million to thousands of older current and former employees.
James Gilreath of The Gilreath Law Firm in Greenville, S.C., and lead lawyer for plaintiffs in the Duke case said of this week's filing, "I can assure you, it ain't a trivial lawsuit."
The filing comes at a time when more companies are rolling back or killing their pension plans. Retirement-plan costs are skyrocketing as the workforce ages.
The lawsuit alleges that Duke Energy converted its defined benefit plan to a cash balance defined benefit plan. Like the IBM case, the lawsuit against Duke claims that the conversion violated the Employee Retirement Income Security Act and the Age Discrimination in Employment Act. The conversion "disproportionately affected" older employees, the suit claimed.
Duke officials could not be reached for comment.
Pension Lawsuit Filed Against Duke Energy!Employee Advocate – www.DukeEmployees.com – February 8, 2006
A cash balance pension lawsuit was filed by employees and retirees against Duke Energy on Monday, February 6, 2006. The class action complaint was filed in U. S. District Court, South Carolina, Anderson Division.
This suit was a long time coming, but all the planets and their moons had to align properly. That and right-to-sue-letters, requested by an employee and a retiree, were issued by the Equal Employment Opportunity Commission (EEOC).
A former Duke Energy site VP once expressed befuddlement as to why employees were filing age discrimination charges with the EEOC. He said the EEOC was holding the charges, but did not know what to do with them. But employees knew very well what to do with them at the proper time. Now the ex-VP may even have a clue.
Daily, employees and retirees would ask the Employee Advocate if a cash balance lawsuit would ever be filed against Duke Energy. All the while, Duke Energy executives tried to pretend that there were no complaints about the cash balance conversion. If everyone was so happy with the cash balance plan, how can Duke explain the hundreds of employees who have signed to be represented by this action? And, not all employees were even aware that it was coming.
Now is the time for all current and former Duke Energy employees, who lost money due to the cash balance conversion, to get on board. It should be obvious to all that this train does not come through every day. Get on board or be left at the station.
If you are a Duke Energy employee, former employee, or retiree who lost money due to the cash balance conversion, call Wallace and Graham at 1-800-849-5291.
Ruth Shaw Scratches Back of Wachovia ExecutiveEmployee Advocate – www.DukeEmployees.com – February 7, 2006
Retiring Wachovia Vice Chairman Wallace Malone Jr. did not lose his pension, or much of anything else, according to The Charlotte Observer. He is estimated to receive $134 million in severance, benefits.
A merger with SouthTrust triggered $33.4 million in severance pay. Mergers tend to bring layoffs for employees and millions of bucks for executives.
He should be able to get by on $33.88 million from the regular pension plan. If not, he also gets $1.66 million from a supplemental retirement plan. But what if that’s not enough? Not to worry; he will receive $480,000 annually from a deferred compensation plan.
Evidently Ruth Shaw wanted Mr. Malone to get all that was coming to him; she heads the compensation committee of the Wachovia board. It’s no wonder that large corporations always seem to be doing the same thing. The same directors are interlocked across many boardrooms.
An Securities and Exchange Commission (SEC) filing detailed the total take:
$34.6 million in restricted stock payable by March 15, 2007.
The SEC has proposed new rules on the disclosure of executive pay and perks. Congress is considering a crackdown on supplemental retirement plans for executives. That is, until the political donations start rolling in.
Cinergy executives will mop up after the merger with Duke Energy:
Jim Rogers, Man of ContradictionsEmployee Advocate – www.DukeEmployees.com – January 30, 2006
Would you believe that Cinergy CEO Jim Rogers was once a long haired consumer advocate? Would you believe that he fought utilities over rate increases? Mr. Rogers offered these revelations to Cincy Business Magazine.
In those days, one wonders how he would have reacted to a utility CEO receiving $23 million just to take a better job? $23 million is the windfall that Mr. Rogers will get, if Cinergy is bought by Duke Energy.
From Danville, Kentucky, Jim Rogers has no shortage of experience. He:
He spoke of owning and operating a “portfolio of utility businesses.” That sounds a lot like a former Duke Energy CEO. He ran the “portfolio” in the ground and hightailed it!
Mr. Rogers said "Our business is running with 20 percent fewer people than nine years ago, but I’ve never laid anybody off. You can honor the people of the company while still streamlining."
Duke Energy used to seldom lay off employees. That was before Duke Energy became just another follower.
Jim Rogers is unquestionably a man with drive and ability. No one expected that Paul Anderson would have selected a chump to fill the Duke Energy CEO slot.
All his potential notwithstanding, Jim Rogers could go either way as Duke Energy CEO. He could work to correct the many employee relations mistakes made by his predecessors. Or, he may try to achieve glory, while ignoring the employees.
Through no fault of his own, Mr. Rogers will not enjoy a long honeymoon with Duke Energy employees. Workers have lost all patience with stonewalling and evasive tactics. Early on, he will need to establish the direction he is going to take – for employees or against them. Then, Duke Energy employees will make their decision whether to throw him a life preserver or a boat anchor.
Ex-Trader Sues Duke EnergyEmployee Advocate – www.DukeEmployees.com – January 25, 2006
Former energy trader, Todd Reid, is suing Duke Energy for firing him in 2002, according to the Charlotte Business Journal. He is suing for $425,000 in lost benefits, up to $5 million for defamation, and legal fees.
A jury acquitted Mr. Reid of all trading related charges last month.
Then CEO, Rick Priory, was trying to ride on Enron’s coattails. He spent over $8 billion building merchant power plants and hiring energy traders from 1998 and 2002.
When Enron went down in flames, Mr. Priory jumped off of the coattails and began denouncing Enron. When the price of Duke Energy stock began falling, Mr. Priory tried to talk it back up. But even he did not have enough wind to pull it off. The price of Duke Energy stock went from $40 per share to $12.
During all this, Duke Power was being investigated for its accounting practices. A Duke Power accountant warned of the problems, but Duke brushed him off time after time. When the accountant went public with his accusations, Duke Power suddenly wanted to explain things.
Todd Reid made a $5 million bonus for 2001 and Timothy Kramer made a bonus of $4 million. Duke fired both employees in 2002, citing “improper trades."
Attorney Jack Lavine said "I think they sacrificed Kramer and Reid on the altar of the SEC. By firing these two guys, they could show the SEC that they had identified a problem and fixed it, so therefore you should leave us alone."
Attorney and legal writer Tom Kirkendall said "With prosecutors threatening them, it was not unusual for companies to put out some sacrificial lambs and leave some former employees to fend for themselves."
Mr. Reid and Mr. Kramer contend that their trading methods were approved by Rick Priory. Mr. Reid has also been acquitted of all charges.
Duke Energy trader Brian Lavielle pleaded guilty to one count in 2005 and was fined $5,000. With the benefit of hindsight, he is evidently regretting that move. His attorney, Chuck Meadows, said that Mr. Lavielle is asking the court to withdraw his guilty plea.
Ruth Shaw was then the chief administrative officer, heading human resources. Trial depositions implicated her as being involved in Mr. Reid’s dismissal.
Attorney Bobby Lapin said "When I asked (Ms. Shaw) do you agree that the buck stopped with you and you were asked to decide on this, she said, 'Absolutely, I was the one.' When I asked her what personal knowledge of Todd Reid she had to justify the (firing), she said she had no personal knowledge, but relied upon what was told her ."
Rick Priory said in an October 2003 deposition that he accepted Ruth Shaw’s recommendation to fire Todd Reid.
Ruth Shaw became the president of Duke Power in January 2003. She later became the CEO, but the company does not acknowledge that anymore. Ms. Shaw will head nuclear energy strategy and public policy, if the merger with Cinergy is approved.
New Duke Energy CharterEmployee Advocate – www.DukeEmployees.com – January 24, 2006
Here it is folks! A brand new Duke Energy Charter for 2006. It is sometimes said that Duke Energy and its employees do not speak the same language. It is said that Duke Energy resorts to doubletalk. Where do these ideas come from?
The Employee Advocate was not able to fully decode the new charter, but it stated something about “con Cinergy.”
Charter de Duke Energy – 2006
Somos Duke Energy, una compañía lider de energía ubicada en el continente americano con una operación de bienes raíces afiliada.
Nuestro propósito es producir el mayor nivel de ganancias para nuestros clientes, empleados, comunidades e inversionistas a través de la producción, conversión, venta y entrega de productos y servicios de energía.
Para ser líderes en una nueva era de crecimiento, debemos:
Al conducir nuestros negocios nosotros valoramos:
Somos exitosos cuando:
The link below is to comments about the 2005 Duke Energy Charter:
Will Merger Benefit Cinergy Execs or Workers?Employee Advocate – www.DukeEmployees.com – January 15, 2006
If Cinergy merges with Duke Energy, will the executives win or the employees?
That’s too easy. Those who make the rules always seem to win, for some reason.
Michael J. Cyrus, executive VP and CEO of Cinergy Corp.'s commercial business, will reap a $9.2 million windfall, according to The Cincinnati Enquirer and regulatory filings. He will not have a new position in Duke Energy, but with a $9.2 million payout, the last thing he needs is a job.
Cinergy CEO Jim Rogers will get a new and better job with Duke Energy, but he will still get $23 million on a silver platter.
Cinergy President James L. Turner will received an accelerated payment of $589,680, plus a new position with Duke Energy.
What will Cinergy employees get?
Hint: Someone has to pay for all the money being showered upon Cinergy executives.
Cinergy employees can expect to forfeit benefits, as they are brought in line with Duke Energy workers’ benefits.
As it is now, Cinergy employees have more holidays and vacation than Duke Energy employees. Most Cinergy employees were able to choose to keep their original retirement plan. Virtually all Duke Energy employees were forced into a cash balance plan. Expect to see the Cinergy employees’ benefits decimated toward the level of Duke Energy workers.
Welcome to 2006Employee Advocate – www.DukeEmployees.com – January 9, 2006
The biggest news at Duke Energy in 2005 was the proposal to buy Cinergy. If the deal goes through, it could not possibly be as big of a disaster for employees as the purchase of PanEnergy. It was almost as if senior management wanted to see how many mistakes could be made.
Just prior to buying PanEnergy, health coverage was made less valuable to employees, under the guise of improving it. Real pensions, earned through years of labor, became ridiculously small, hypothetical cash balance amounts. The details of the conversion were hidden from employees. All Duke Energy provided was an armload of cartoon booklets to explain it all!
When the merger went through, it triggered a bonanza of payoffs for PanEnergy CEO Paul Anderson. Plus, he had a new job with Duke Energy.
Rick Priory became the CEO of Duke Energy and began chasing deregulation, energy trading, and Enron emulation.
Paul Anderson left Duke Energy, rolling in cash.
Rick Priory continued to squeeze employees by taking away retirement health care. All promises to employees were broken and fanciful promises were made to investors. The “guarantees” to investors were laid on deeper each quarter to keep the stock price pumped up.
All the ingredients for failure were now in place:
A fine trading tower was built. But it was built of paper mache. Those who were blinded by Enron’s phony profits, also flocked to Duke Energy. Paper mache goes up fast and looks grand for a while. Rick Priory was taking bows and having his head measured for a golden crown.
But, alas, paper mache has no substance. It looks good on a sunny day, but tends to fall apart when exposed to the elements. If it cannot stand up to water, how do you think it holds up in a storm – a “perfect storm”? Duke Energy became Enron’s weak sister. It was not as big and bad as Enron, but oh, how it wanted to be.
When Enron inevitably imploded, Rick Priory still did not have a clue. He thought that this was a golden opportunity for him to become the new Ken Lay! Duke Energy was now poised to become the new Enron. Why not just wish for a direct lightening bolt strike?
Trying to reinvent reality to satisfy wishful thinking works about as well for CEO’s as it does for presidents. They are always so surprised when halfway down from the high diving board, they suddenly realize that the pool is empty! A graceful recover cannot be made, only a big, bloody splash.
As the paper mache tower became soggy and began to crack and crumble, the executives went into a frenzy. They patched here and painted there. The even declared a perfect storm. They had no inkling of how futile their efforts were. The paper mache tower was of poor design; it could not survive. Spin doctoring could not save it. Blaming the media could not save it. Wall Street Journal ads could not save it. It was doomed from day one. It was only a matter of time before it fell. But once the fissures started, it was surprising how quickly the end came.
Duke Energy was fortunate to survive. Enron was in way too deep for any chance of survival. Duke Energy only wanted to be like Enron; it was not a clone. The difference between the two companies saved Duke Energy. Duke wanted to be like Enron, but did not have sham corporations and phony profits that eventually sunk Enron.
Stock that went up like a rocket came down like a rock. After all this, Mr. Priory could not see any mistakes that he had made. He tried to bend the universe to his will. In the end, the only thing bent was Mr. Priory. No golden crown was delivered, only a dunce cap.
Who could possibly save Duke Energy?
Then along came Paul – Paul Anderson, that is.
Yes, the same Paul Anderson that had successfully run PanEnergy. The same one who cashed in big time when Duke Energy bought PanEnergy. The same one who left Duke Energy in high style. All this time, he had not been sleeping under a bridge. After leaving Duke, he fell into a real gold mine, made more money, and retired.
Duke Energy directors showed up on Paul Anderson’s door step. They realized that Duke Energy needed a real CEO, not a day trader and not a day dreamer. With the promise of million of dollars worth of stock, Mr. Anderson graciously accepted the position of CEO and chairman. It was really more than a promise. He got a real contract, not the phony baloney promises that employees always get. You know, the kind that promise everything, but deliver nothing. Get out your old retirement plan statements and compare the numbers to the cash balance amount. You will get the drift.
If Paul Anderson were to fall out of a window and into a dumpster, it would be filled to the top with thousand dollar bills and smell like perfume. Never bet against Paul Anderson.
The Employee Advocate was confident that Paul Anderson could fix the problems created by his predecessors. But it was amazing how quickly sanity was restored.
2006 looks a lot like 1996. In 1996, employees knew their pensions were going to be raided, a new CEO would be appointed, and a merger was coming. In 2006, pensions have been raided, a new CEO is on the way, and a merger is imminent.
If the merger is approved, Cinergy CEO Jim Rogers will have a better job, plus an instant $23 million. Why should he get $23 million to take a better job? Well, just because. It’s a CEO thing. It is often said that CEO’s are entitled to staggering compensation because of all the risk that they take. Just what is the risk in getting $23 million shoved into one’s face? The only risk is a possible hernia from lugging all the cash to the bank!
The merger will trigger a windfall payout of over $180 million for the Cinergy executives!
If a company should buy Duke Energy, the whole vicious cycle would start up again! Then windfall payouts would be triggered for Duke Energy executives.
Buying Cinergy makes more sense than buying PanEnergy ever did. But with the benefits issue unresolved, the scenario is being repeated. If it takes hoodwinking the employees for a business to succeed, then the business will never make it. The executives appear to be mixing up another batch of paper mache.
The unionized Cinergy employees were able to choose to keep their old retirement plan. Ignoring the pension losses of Duke Energy employees and blithely buying Cinergy will not smother the issue. It will throw gasoline on the already glowing red problem. Stand clear!
Duke Power did not make it through 2005 without a major power outage. About 700,000 customers lost power in December. A 2003 study indicated that Duke Power’s lines were inadequate to handle ice storms. There has been no follow up.
Once again Fred Fowler’s Safety Steering Team failed to prevent all injuries, sicknesses, and fatalities on the job. No sane person actually thought that it would, but Mr. Fowler said it would. Using Paul Anderson’s numbers, there were five contractors killed on Duke Energy jobs in 2005.
Paul Anderson gets credit for not trying to hide the number of fatalities in 2005. He has repeatedly expressed remorse over the number of fatalities. He only asked for improved safety conditions. It was a reasonable request. It was his underlings that turned safety into a sideshow. They tired to outdo each other with phony predictions, silly slogans, contemptible creeds, pathetic posters, stodgy stickers, banal banners, and pompous programs ad nauseam.
The pay is not too bad in the cheerleading business.
The Securities and Exchange Commission recognizes the problem of outrageous executives compensation.
Two former Duke Energy executives were cleared of trading fraud.
In 2005, the Justice Department came to the realization that bribery and corporate lobbying are sometimes one and the same.
The Government Accountability Office made it official that employees lose money with cash balance pension conversions. All employees already knew this. It was corporations and consulting firms that kept promoting the big lie of how great cash balance plans are. It is always those who profit from implementing these plans, who claim how great they are.
Duke Energy cannot stop squandering money on dumb ads.
A peer group evaluated a Duke Energy nuclear site and reported the findings. The problem of low morale was listed. A management member was heard to say that he did not believe it. He said that it might be one or two individuals, but he did not think there was any morale problems at Duke Energy.
Duke Energy has to pay for these evaluations, but when problems are identified, some in management refuse to believe it. Hold that thought. When the results of the 2005 Employee Opinion Survey pointed out the very same problem, what could the doubters say? It turns out that the department of the one who could not believe that there was low morale at Duke Energy, had the worst morale in the entire company!
The morale finding of the peer group was ridiculed, but the Duke Energy survey results could not be laughed off. After years of taking surveys and spinning and hiding the results, management wants to know what the problem is. What a radical concept. Instead of paying to find problems and then hiding them, Duke Energy is now going to follow up on them!
Local management said, up front, that they could not do anything about the cash balance plan. Duke Energy has denied for years that the cash balance plan was a problem with employees. It is very strange that the cash balance plan was the first thing mentioned that was out of local management’s control. Try as Duke Energy will, it cannot spin this one away.
IBM is appealing portions of its cash balance plan ruling, but continued to make settlements on some issues in 2005.
Duke Energy has been the ring leader in lobbying for reductions in North Carolina Workers’ Compensation benefits. Duke Energy does not want its employees to have their full pensions, retirement health care, or even just compensation for on the job injuries.
Why should it matter about Workers’ Compensation benefits, if Fred Fowler is going to prevent all injuries? If there were no injuries, no one would ever collect a dime! Could it be that the Duke Energy executives know that Mr. Fowler is blowing smoke. If the executives do not believe him and the employees do not believe him, who is he playing to? Perhaps his own ego?
The Employee Advocate and hundreds of employees and retirees of Duke Energy/Duke Power, Alcoa, Philip Morris, Celanese, and other companies went to Raleigh to protest the Workers’ Compensation cuts.
Duke Energy is still trying to get out of its obligation to compensate employees for health problems caused by asbestos. Duke Energy bought $1.6 billion worth of insurance to cover asbestos claims. The “finite risk” insurance opens up a new can of legal worms.
Much truth was revealed in 2005. A professor, who was an early proponent of granting stock options to CEO’s, has realized that they are not such a good idea after all!
What does Duke Energy do when it is not taking benefits from employees? It takes land from the citizens.
Bill Coley, former president of Duke Power, became the CEO of British Energy.
The 2005 Meeting of Duke Energy Shareholders only lasted 40 minutes!
When Brew Barron became the executive vice-president of Nuclear Generation, he had big shoes to fill. His predecessor, Mike Tuckman, retired at the top of his game. Not only did Mr. Barron have a good run in 2004, but Nuclear Generation won unprecedented peer recognition in 2005. He is filling the shoes.
Paul Anderson did NOT have big shoes to fill. All he found was a worn out pair of flip flops. He has not made any mistakes. Even failing to address the employees loss of benefits cannot be called a mistake. He never said he would address the issue.
Most legal issues have been settled under Paul Anderson. All these issues were settled as the result of lawsuits. Duke Energy will do the right thing, but only if forced to. The Employee Advocate has known all along that the issue would never be resolved without legal action.
Rick Priory was given many chances to resolve the issue. It was only after his repeated refusals to address the matter that age discrimination charges were filed with the Equal Employment Opportunity Commission. Paul Anderson has likewise been given many opportunities to settle the issue. Stay tuned.
Happy New Year!
Charges Against Duke Energy Trader DroppedEmployee Advocate - www.DukeEmployees.com January 8, 2006
The Associated Press reported that the remaining 12 counts against former Duke Energy executive Timothy Kramer were dismissed by Judge Nancy Atlas. He was previously found not guilty on seven counts of allegedly manipulating energy trades.
Shock Treatment Recommended for Duke Power ExecutivesEmployee Advocate – www.DukeEmployees.com – January 6, 2006
News@Norman has been known to print a few fluffy articles about Duke Energy and Duke Power. But following the tradition of The Charlotte Observer, the fluff is liberally sprinkle with lumps to the head. Below is the News@Norman assessment of Duke Power, published January 4, 2006:
Good gracious, folks, can’t you figure out what’s wrong with electric service in Denver? Just last week we had another 1,400-plus customers without power for hours, and this was on top of the ice storm the week before that. If power company honchos were sailors, the executives at Duke Power should be hijacked by pirates and given shock treatments.
Don’t expect any fluff next week. On January 5, 2006, many Denver businesses had to close early, due to a blackout. Shock treatments can be avoided as long as the circuits are dead. The executives are too clever to provide power to be used for their own treatment.
Officials Question Duke Power’s Grid ReliabilityEmployee Advocate – www.DukeEmployees.com – December 26, 2005
Greenville Mayor Knox White said Duke Power’s local power lines remains the company's biggest weakness, according to the Associated Press. He said "It's a wake-up call to Duke to take a look at older infrastructure. They were put there in the 1950s and no one ever looked at it again."
The Dec. 15 storm knocked out power to about 700,000 customers. Duke Power denies any problems.
The South Carolina consumer advocate for utility issues said that a 2003 study indicated that Duke Power’s lines were inadequate to handle ice storms. The question remains as to why the report was never followed up on.
Here’s one that employees knew would come back to bite Duke Power: The independent report reached the conclusion that staffing reductions may have impaired Duke Power’s overall system reliability.
Corporations love to reduce the muscle, to better compensate the fat. But in times of stress, fat tends to fail.
Utilities chasing the deregulation bubble only wanted to spend money on energy trading, not the overworked transmission systems.
When a storm knocks out power to hundreds of thousands of homes, it can takes week to repair the damage. Utilities can spin the statistics, by excluding major storms. But the statistics do not impress people without power for weeks. The last person to have their power restored is in no mood for happy talk.
Power Outage, December 2005Employee Advocate – www.DukeEmployees.com – December 25, 2005
In the Dec. 21 issue of News@Norman, Anna J. Fortenberry wrote about the recent Duke Power outage, due to an ice storm. She wrote: “Worse than being without power was the fact that no one could get through on the ‘hot lines’ to Duke Power to report their outages. And when they did finally get through, the customer service people couldn’t tell them when to expect restoration of power.”
The Employee Advocate cannot understand how not getting through on the hot line could be worse than losing power. If fact, with no loss of power, who needs a hot line?
Pat Kowaiski called “Power On.” She said “I waited for a half-hour on the line. She (the Duke employee) was so rude to me on the phone. I imagine she’s had a lot of calls. I told her the house was getting rather cold and she said, ‘you’ll just have to make outer arrangement’ not giving me a clue about when power would be on. She just wanted to get me off the phone.”
A comedian once said that a bill collector wanted to know when he could expect payment. He told the collector that he could expect payment at any time, but actually getting the money was going to be his problem. The same holds true for power outages. One can expect anything, but the power comes on when the power comes on.
Those answering the phones are not in bucket trucks, they are in front of computers. They can access some information. They cannot say that Joe Blow will have his power back on at 12:36 a. m., Tuesday. After the outage is initially reported, everything else is hand-holding. You may be told “We are working on it,” “As soon as possible,” “Crews are coming in from Timbuktu,” “We understand your frustration.” But calling back 10,000 times will not get your power back on one second faster.
Joe Meyers said “We just put up with them coming in here cutting down the trees. Now this. We can’t win!”
Trimming trees does not guarantee that there will be no power outages, it only reduces the risk. As long as power lines are strung from poles, they are sitting ducks for every storm. Duke Energy said that there would be no more on the job deaths, injuries, and sicknesses. It never said that there would be no more power outages. Naturally, Duke could not deliver on the boastful safety prediction. There will always be deaths, injuries, sicknesses, AND power outages. Even if all the lines were buried, all outages would still not be eliminated.
News@Norman became so frustrated with reoccurring power outages that in January it published a letter for readers to clip and mail to Duke Power President and CEO Ruth Shaw. (The CEO title has now mysteriously disappeared.)
Duke Energy Executive Pay for 2006Employee Advocate – www.DukeEmployees.com – December 23, 2005
Here the rundown on 2006 Duke Energy executive pay:
COO Fred Fowler will receive $755,500 in base salary.
Chief Development Officer, Jim Mogg will get $540,000.
For Duke Power President Ruth Shaw, $510,000.
Much ado is made of the fact that Chairman and CEO Paul Anderson does not receive a salary. There is no doubt that that some people think he works for free. Paul Anderson receives no salary, but he is paid in Duke Energy stock and options. He does not work for free, nor should he, but he still gets paid. The dividends are paid in cash, so it would be incorrect to say he receives no cash. How much in dividends? Over $700,000.00 in 2004. So, even if Duke Energy stock goes to zero, Mr. Anderson is still not working for free. But his wife really does work for free. No tricks, no gimmicks, she really works for free. Of course, Mr. Anderson probably buys her lunch, from time to time.
It is said that Mr. Anderson does not receive any bonuses. That is another play on words. He does not receive cash bonuses, but receives them in Duke Energy stock. He racked up a $3 million stock bonus in 2004.
The big money is always in bonuses. Executives do not bother with bonuses of the one or two percent variety. 2006 executive bonuses can be from 75 percent to 90 percent of the annual salary.
It is interesting that to receive the full bonus, there must be zero employee or contractor fatalities. This implies that the executives will expose employees to potentially fatal hazards, unless they receive extra pay not to!
Jobs can be made more safe, but accidents and injuries will never be eliminated. It is possible that Duke Energy could go a year with no fatalities. But it would not be because of any bonuses or hackneyed programs hatched by the executives.
Here is how most safety programs work: Silly safety programs are constantly rolled out. Most of the programs, slogans, and creeds are worthless. But if Duke Energy should luck up and go a period of time with no fatalities, the credit would be given to whatever program was hot at the time. The executive who proposed the program would be given demigod status and go on a road show, promoting the inane program to other companies. The other 999 programs that were total failures would never be mentioned.
It can be really strange the way executive titles bounce around. Ruth Shaw was promoted to the president of Duke Power. Then she became the CEO of Duke Power. But somewhere along the line, the title of CEO evaporated. She is only referred to as the president of Duke Power now. Duke announced that Ellen Ruff will replace Ruth Shaw and become the Duke Power president. Somewhere, a CEO position fell through the cracks. Maybe titles are a lot like pensions; here today and gone tomorrow.
Sources: Duke Energy SEC filings, The Charlotte Observer, The Charlotte Business Journal.
SEC Takes on Excessive Executive PayEmployee Advocate – www.DukeEmployees.com – December 20, 2005
The Securities and Exchange Commission (SEC) plans to address the problem of excessive executive pay, according to the Los Angles Times.
SEC Chairman Christopher Cox said "It is absolutely a top priority for early '06. It's important to get clear information — both to investors and to the directors that represent them...One of the difficulties in capturing the total compensation amount is the contingent nature of some of these contractual obligations...It is much more important for directors, investors and the marketplace to know that someone is being paid $10 million than to know that he or she is being paid in the form of postage stamps or rare coins."
Investors are frustrated at the endless largesse flowing to executives. Employees have a hard time understanding why they lose pensions and other benefits, while the board keeps inventing new ways to shove money at the executives.
The SEC also intends to look at CEO retirement plans and severance agreements.
Part of the problem is that now corporations can, and do, hide executive compensation all over the place. The footnotes take from employees and give to executives.
Executives can reap millions in the event of a buyout. In the case of the Duke Energy/Cinergy merger, Cinergy CEO Jim Rogers stands to receive a $23 million windfall, according to BusinessWeek. But this is not even a hostel takeover. Mr. Rogers wants to be bought out – and how does he want to be bought out! He will get a better job as CEO of Duke Energy, undoubtedly more pay, and the $23 million for breathing!
The windfall for the whole Cinergy executive crowd amounts to over $180 million, according to The Charlotte Observer. With millions of dollars falling out of the sky for executives, employees wonder why their meger pensions must be forfeited.
Pensions were designed to keep those too old to work from sleeping in abandoned cars and eating cat food. With millions of dollars coming at executives from every direction, they do not even need a pension. But they get one anyway - sometimes they are worth millions of dollars per year!
On top of everything else, corporations do not even have to report many executive perks, valued at less that $50,000 a year.
Do not miss an opportunity to provide the SEC with feedback concerning exorbitant executive pay. The CEO’s will be writing in – saying that they need even more!