Constellation Energy Removes Compensation Program from Proposed Joint Venture with EDF Development, Inc.
March 20 2009 - 4:00PM
Business Wire
Constellation Energy (NYSE:CEG) today announced that it will not
pay to any Constellation employee any payments it receives from EDF
Development, Inc. (EDF) that were originally earmarked for
potential payments to its employees under Constellation Energy's
long-term incentive plans.
In December 2008, both Constellation Energy and EDF were
concerned that the potential instability of the workforce could
lead to retention issues among key managers in the company,
particularly those highly skilled in the areas of safety and
reliability. In response to these concerns, and in light of the
fact the company had no existing retention program in place, a
decision was made to use an existing long-term incentive plan as a
potential retention vehicle. None of the senior officers of
Constellation Energy, including the chief executive officer and
members of the management committee, were guaranteed payments under
the plan.
�In December 2008, Constellation Energy had an urgent need to
stabilize the leadership of the company given the tumultuous state
of the global markets and Constellation Energy's financial
condition at the time,� said Mayo A. Shattuck III, chairman,
president and chief executive officer of Constellation Energy. �EDF
demonstrated a full commitment to the company by agreeing to pay
the compensation on two specific long-term plans, which in the
aggregate amounted to less than 1 percent of the total annual
employee compensation costs of the company.
�Since that time, there has been a tremendous amount of concern
over employee compensation throughout the country, and this program
has been misconstrued by some as a potential cost to our BGE
customers, who we recognize are struggling with high energy bills.
The funds for this program were coming entirely from EDF and would
not have impacted BGE rates. Nonetheless, we have determined that
this issue has become a significant distraction to the important
long-term benefits for Maryland that our strategic partnership with
EDF represents. Also, since December, the fundamental outlook for
Constellation Energy has improved. As a consequence, we have
decided to remove this compensation issue from the critically
important review of our transaction with EDF.�
About Constellation Energy
Constellation Energy (www.constellation.com) is a leading
supplier of energy products and services to wholesale and retail
electric and natural gas customers. It owns a diversified fleet of
generating units located throughout the United States, totaling
approximately 9,000 megawatts of generating capacity, and is among
the leaders pursuing the development of new nuclear plants in the
United States. The company delivers electricity and natural gas
through the Baltimore Gas and Electric Company (BGE), its regulated
utility in Central Maryland. A FORTUNE 500 company headquartered in
Baltimore, Constellation Energy had revenues of $19.8 billion in
2008.
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