Brooks out, Hyle in as Constellation Energy shakes up management team
Baltimore Business Journal - by Robert J. Terry Staff
Media
Baltimore's two highest-paid executives lost their jobs Tuesday.
Thomas V. Brooks, president of Constellation Energy Resources and executive vice president of parent Constellation Energy Group, resigned effective immediately, as did George E. Persky, senior vice president of Constellation Energy (NYSE: CEG) and chief commercial officer for Constellation Energy Resources.
The moves were the result of an executive management team reshuffling in which the company named Kathleen W. Hyle chief operating officer. She is tasked with leading the energy giant’s commercial business.
Hyle, a Baltimore native and Loyola College graduate, will lead the company’s new management team and report directly to CEO Mayo A. Shattuck III.
Brooks ran the Constellation business unit that handles its retail, wholesale and commodities business. It has come under fire since August, when it revealed an accounting error that underestimated the collateral needed to cover its merchant energy contracts in the event of a credit downgrade.
Brooks, the region's top breadwinner, earned $7.6 million in 2007 in total compensation. Persky earned $6.8 million the same year.
The moves are the latest management changes at Constellation in the wake of its agreement Sept. 18 to be acquired by Iowa-based MidAmerican Energy Holdings Co., a subsidiary of billionaire Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A, BRK.B), in a $4.7 billion deal.
In announcing the moves Tuesday, Shattuck said he was “personally taking a leadership role” as the energy giant seeks to be “agile in capitalizing on new strategies” — perhaps shedding light on his future role with the company, which was called into question after the deal was announced and was the subject of an Oct. 21 filing Shattuck made with the U.S. Securities and Exchange Commission.
At that time, Shattuck said he would remain Constellation’s CEO through Oct. 31, 2009, “if so requested by MidAmerican.” A MidAmerican Energy spokeswoman said then that company officials hadn’t discussed Shattuck’s future role with the company.
In announcing Hyle’s appointment Tuesday, Shattuck said in a statement that Constellation was “working diligently to de-risk our portfolio and reshape our businesses to address a radically changed environment. As we continue to execute on these strategic objectives, it is imperative to appoint a leadership team that embraces our vision, is agile in capitalizing on new strategies, and is committed to achieving our collective goals.”
Hyle and her management team, he added, “will accomplish our transformation objectives with great skill and diligence.”
Constellation Energy spokesman Robert L. Gould declined to elaborate Tuesday on the reasons for the moves.
Hyle joined Constellation Energy in 2003 and was most recenty senior vice president of finance and CFO for Constellation Energy Nuclear Group. She was also chief financial officer of UniStar Nuclear Energy LLC, a joint venture between Constellation and French power giant EDF, and has held senior positions with Alamo Rent-A-Car and Black and Decker Corp. (NYSE: BDK).
Constellation said Oct. 21 that John R. Collins, chief financial officer for Constellation since May 2007, would step down and continue to serve in an advisory role during the proposed merger. Irving Yoskowitz, who joined Constellation in 2005 as general counsel, will retire.
The proposed union between Constellation and MidAmerican could take nearly a year to close and would need the approval of federal and state regulators and shareholders.
Constellation filed its application for the merger with the Federal Energy Regulatory Commission on Oct. 15 and filed its application with the Maryland Public Service Commission on Oct. 17. The PSC held a pre-hearing conference on the merger filing Nov. 3.
In its Nov. 6 third-quarter earnings call, Shattuck, a former investment banker who helped build the energy company’s trading book when he took over in 2001, said the company would pull back on its exposure to risk — a shift from the bold business strategy that had transformed the perception of Constellation in the eyes of Wall Street as a stodgy utility company.
Constellation lost $225.7 million in the third quarter and said it plans to sell off its Houston-based natural gas trading business, an entity that has boosted Constellation’s earnings over the last two years.
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