Baltimore Gas and Electric customers may get a small payday if Constellation Energy’s proposed sale goes through, but its top executive has agreed to waive his not-so-small one.
In a 170-page proxy statement filed late Friday with the Securities and Exchange Commission, Constellation provided details of the fast-paced discussion leading up to its acceptance last month of a $4.7 billion buyout by MidAmerican Energy Holdings Co.
In that statement, Constellation CEO Mayo Shattuck said he would waive $18 million in severance he stood to gain as a result of the merger and asked that it be donated to a charity, the Constellation Energy Group Foundation. MidAmerican would match the donation.
However, Shattuck is still in line for $10.9 million in previously owed incentives if shareholders and regulators approve the merger, according to the filing. And if he is terminated within two years of the merger’s completion, under most scenarios he would get another $11.3 million in bonuses.
When Constellation and Mid-American announced the deal on Sept. 17, both sides said Shattuck’s future with company had not been discussed. The filing gave no further indication, and Constellation spokesman Rob Gould declined to make further comment Sunday.
Iowa-based MidAmerican on Friday also filed an application with the state’s Public Service Commission to acquire BGE. In that application, MidAmerican would halve the 5 percent cap that would apply to any BGE delivery rate increase in 2009.
The company, a subsidiary of super investor Warren Buffett’s Berkshire Hathaway, also promised not to increase the amounts charged for delivery of BGE gas and electric power to customers for 2010 and the first half of 2011.
Benefits for BGE’s 1.1 million residential customers could total $70 million over three years. Customers recently received a one-time $170 credit as part of Constellation’s $350 million settlement with state authorities.
MidAmerican CEO Gregory Abel said in a statement that the company’s ability to make those promises stemmed from the strength of its parent firm.
“This merger will deliver significant long-term benefits to our customers, employees and the communities we serve by allowing BGE and Constellation Energy to operate autonomously and providing the strong financial backing of Berkshire Hathaway,” Abel said.
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