CHARLOTTE – Duke Energy has entered an agreement with Elliott Investment Management L.P., after months of pressure from Elliott, which holds a significant ownership stake in Duke Energy.
The agreement between the two parties includes the appointment of two new independent directors to Duke Energy’s board of directors, the first of which is Idalene Kesner, the dean of Indiana University’s Kelley School of Business, and the second of which will be appointed by the end of March 2022, according to a statement from Duke Energy.
According to Duke Energy’s statement, Elliott has agreed to “customary standstill, voting and other provisions for a period of one year.” The full agreement between Duke Energy and Elliott will be filed on a Form 8-K with the SEC, the company said.
“We are pleased to have reached this constructive agreement with Elliott and delighted to welcome Idie Kesner to the Duke Energy board,” said Lynn Good, Duke Energy chair, president and chief executive officer. “Idie brings a wealth of strategic experience to the company as we advance our clean energy transformation.”
A May 2021 letter from Elliott argued that Duke Energy should split the company into three regionally focused entities, which Duke Energy called “illogical, complex” and “financially unsound and ran counter to the strategic direction of the entire industry.”
Elliott made another letter public in July, in which the investor sought enhanced board independence, and an increased focus on Indiana, among other items.
Duke Energy described Elliott’s July letter as an “attempt to undermine Duke Energy’s leadership team,” noting at the time in a statement that it “ignores the diverse and experienced professional talent that drives this company and is silent on the significant accomplishments it has achieved.”
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“We remain enthusiastic about the strong long-term growth opportunities in each of Duke’s unique utility franchises, which operate across attractive jurisdictions,” said Jesse Cohn and Jeff Rosenbaum of Elliott, in a statement. “We support today’s appointment to the Board, which brings new Indiana perspectives to Duke.”
Michael Browning, who has served as Duke Energy’s independent lead director since 2016, will retire from the board at the end of his current one-year term, consistent with the board’s retirement policy, the company’s statement noted.
Reuters broke the news that an agreement between Duke Energy and Elliott Management was being discussed in a story last month.
Earlier this year, WRAL TechWire reported that Elliott Management was pressuring GlaxoSmithKline. Elliott Management advocated for changes at AT&T in 2019.
