Five current and former SCANA executives could earn payouts totaling $21.6 million if Virginia-based Dominion Energy closes on its deal to buy the troubled, Cayce-based power company.
The “golden parachutes” — written into the executives’ contracts in case of a sale or takeover — are worth far less now than they would have been a year ago, before SCANA’s stock price plummeted with the collapse of its $9 billion nuclear construction project.
SCANA’s executive team once stood to earn roughly $60 million to walk away if the utility had been sold in less-turbulent 2016.
The payments, detailed in a late Wednesday filing by Dominion with the U.S. Securities and Exchange Commission, could pay:
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▪ $10.4 million to Chief Executive Jimmy Addison, who was promoted to that position on Jan. 1, a day before SCANA agreed to sell itself to Dominion
▪ Nearly $4.2 million to Chief Operating Officer Keller Kissam, also promoted on Jan. 1
▪ $2.9 million to Chief Financial Officer Iris Griffin, promoted to Addison’s old role on New Year’s Day
▪ $3.1 million to former Chief Executive Kevin Marsh, who announced his retirement last October at the request of S.C. lawmakers who fumed over his handling of the V.C. Summer project and its late July abandonment. That money previously was earned as part of SCANA’s long-term equity plan for employees.
▪ $1.1 million to former Chief Operating Officer Stephen Byrne, once the company’s top nuclear official, who oversaw the failed construction project. That money also was previously earned as part the long-term plan.
Those payments would be triggered if Dominion closes on its $14.6 billion buyout of SCANA – a long shot to happen, Wall Street analysts watching the deal say – and if the executives leave “with reason” or are fired without cause.
Dominion has hinted that some or all of SCANA’s current executives might stay on board, continuing to run the utility from its Cayce headquarters. One SCANA board member or executive is slated to become a part of Dominion’s board.
However, as of Wednesday, no SCANA executive had made an agreement with Dominion regarding their future role, if any, with the company, the filing states.
“As you know, we have committed to keeping SCE&G’s headquarters in Cayce, so it would be natural for members of the leadership team who know the system, customers and communities to remain in place,” Dominion spokesman Chet Wade said Thursday. “However, it is much too early in the integration process to have any specifics. We don’t have a timetable for determining that yet.”
Golden parachutes are common in the corporate world, where companies want their executives to put shareholders’ interests ahead of keeping their own paychecks and bonuses rolling in. Such payouts are intended to ensure high-level managers don’t attempt to thwart a deal to save their own jobs.
The payouts would be calculated according to a complex formula that accounts for each executive’s base salary, performance-based pay, company stock ownership and retirement plans.
Addison stands to earn $5.3 million in cash, the filing states. Kissam would get $2.4 million in cash, while Griffin would get nearly $1.9 million.
Marsh and Byrne would not earn any additional compensation related to the acquisition, but their stock payout would be paid faster than the three years it typically takes, a SCANA spokesman said Thursday.
Dominion’s calculations assumed the acquisition of SCANA will become final on Sept. 30. It also factored in a SCANA stock price of $45.19 a share – about where it was before the Dominion deal was announced.
SCANA stock was trading at $36.69 a share when the market closed Thursday afternoon. That is more than $13 a share less than Dominion’s takeover offer, a gap that suggests Wall Street investors do not think the deal will close.
SCANA said last month it decided against offering its own severance package to either Marsh or Byrne, citing “the unique context of the (nuclear project’s) abandonment and the company’s responsibilities to our ratepayers and shareholders.”
Some lawmakers have bristled at the possible golden parachutes.
Before lawmakers reconvened in Columbia last month, state Rep. Kirkman Finlay, R-Richland, filed a proposal to block SCANA from paying its top executives a severance package worth any more than fired nuclear construction were paid when the V.C. Summer project was abandoned.