AGL Energy – the company at the centre of relentless attacks by conservative forces over the decision to close the Liddell coal generator – has announced managing director and CEO Andy Vesey has stepped down as CEO with immediate effect, and will leave the company after almost four years in the role.
AGL says Brett Redman, who has been AGL’s Chief Financial Officer (CFO) since 2012, has been appointed as interim CEO, effective today.
Vesey’s sudden departure comes only a fortnight after AGL’s full year results, when he said he had “no current plans to retire. …I’m here today, I’ll be here tomorrow, I’ve got plenty of work to do; I’ve laid out a 36-month strategy today and it’s my plan to deliver that,” he said.
The reason for the departure has not been explained but the timing is extraordinary – coming on the same day as another leadership spill in Canberra caused by the deep divisions in the Coalition government over energy policy.
At the heart of that debate has been the future of Liddell – Vesey and AGL have defended the decision to close it, saying it is an ageing and unreliable clunker that would cost more to maintain than to replace it with solar, storage and some gas.
.@TonyAbbottMHR We’re getting out of coal. We committed to the closure of the Liddell power station in 2022, the end of its operating life.
— Andy Vesey (@AndyVesey_AGL) September 5, 2017
But that has become a lighting rod for conservative dissent against the clean energy revolution, and the Coalition government has been threatening to force AGL to sell the asset if it won’t keep it open.
Thanks @AndyVesey_AGL for your leadership in driving the transformation of the Australian energy sector. Stood up to absurd claims & pressure. https://t.co/6hl7xFkBpg via @FinancialReview
— Kane Thornton (@kanethornton) August 24, 2018
This is despite assessments from the Australian Energy Market Operator –confirmed in today’s annual Electricity Statement of Opportunities – that there is no expected breach of reliability standards.
Vesey, a New Yorker, became the focus of attacks from conservatives in the media; attacks that intensified after AGL, like other big utilities, announced huge increases in profits as energy bills surged in the last two years.
AGL CEO Andy Vesey has resigned this morning – here’s hoping his successor will ensure that the site at Liddell continues to power the Hunter and NSW well into the future. https://t.co/uRV0qsPePL
— Taylor Martin MLC (@TaylorMartinMLC) August 23, 2018
Vesey was hired four years ago, and used to joke that when he was interviewed for the job he thought the company was the biggest investor in renewable energy in Australia, but by the time he got here it was the biggest operator of coal-fired generation.
It sill sources more than 80 per cent of its electricity from coal after the purchase of Bayswater and Liddell in 2014, and the earlier purchase of Loy Yang A in Victoria.
There is no indication whether there was division between the board and Vesey, or if this was a personal decision. Vesey’s partner remained in New York because she was unable to move countries due to child custody issues, and Vesey spent much time there even as CEO of AGL.
The company’s share price has fallen from $21.82 at the start of this week to around $20.40 at midday on Friday, but appeared to be stable (up 0.9%), at the time of publication.
We will update this story as more information comes to light.
In the meantime, the AGL release follows:
Mr Vesey has stepped down from AGL’s Board but, in order to ensure a smooth transition, he will remain employed by AGL in an advisory capacity to the Board until 31 December 2018.
Damien Nicks, currently AGL’s General Manager, Group Commercial Finance, has been appointed interim CFO.
AGL Chairman Graeme Hunt said: “Succession planning for the Managing Director and CEO is a matter of key importance to the AGL Board at all times.
“Over recent months, we have increased our focus on the development of internal candidates and on maintaining an active view of potential external candidates. As a result, a domestic and international search process including strong internal candidates is well progressed, and the Board has decided to take that process to the next step. That search will now enter a final phase to enable us to complete an appointment.
We thank Andy for his great contribution to AGL. At a time of considerable uncertainty in our sector, he has driven our transformation agenda to meet two key strategic imperatives: to prosper in a carbon-constrained future and build customer advocacy. He leaves the company in a robust financial position from which to continue to lead investment in our transitioning industry and in our long-term growth.
Mr Redman said: “AGL’s priorities during the coming weeks will continue to be the safe and reliable operation of our assets, serving our customers to the best of our ability, and listening and responding to all our stakeholders. I have greatly enjoyed working alongside Andy to deliver our transformation agenda over the past four years and I look forward to continuing to implement AGL’s strategy while the Board completes the succession process.
Mr Vesey said: “It has been an honour to lead AGL – and a privilege to have had the opportunity to engage in the complex questions of the sustainable transformation of Australia’s energy sector over recent years. I am proud of what the AGL team has achieved during those years and I am now looking forward to observing AGL’s continued success.”
