Three top executives who exited NiSource one year ago have had their positions terminated at Columbia Pipeline Group, meaning they will be able to collect lucrative golden parachutes that were prepared for them.
TransCanada Corp. two weeks ago informed Columbia CEO Robert Skaggs Jr., President Glen Kettering and CFO Stephen Smith their jobs would be terminated at the close of its $13 billion acquisition of their company, which occurred on Friday, according to company filings with the U.S. Securities and Exchange Commission.
All three left NiSource for Columbia one year ago when the Merrillville-based utility holding group spun off Columbia into a separate, publicly traded company. Soon after, Columbia was fielding inquiries from other companies interested in merging with or purchasing it.
Former NiSource CEO Skaggs will receive a golden parachute with a total value of $23.6 million, according to a proxy statement filed by Columbia on May 17 with the U.S. Securities and Exchange Commission.
Former NiSource CFO Stephen Smith will reap $9.55 million for his Columbia golden parachute and former NiSource Group CEO Glen Kettering will receive $7.27 million.
In addition, like all other former Columbia stockholders, the three will receive $25.50 for each share of Columbia stock they held.
Skaggs will reap a $23.44 million payout for the 919,078 shares of Columbia stock he owned. Smith will be paid $6.71 million for his shares, and Kettering $4.55 million for his. They came into those large holdings when all NiSource shareholders received one share of Columbia for each share of NiSource they held at the time of last year's split. These stock payouts are separate from their golden parachutes.
Skaggs and Kettering also will collect payments for "phantom shares" they hold, according to Columbia's annual report. Phantom shares are in effect a cash award tied to the stock price of the company. Skaggs should be be able to cash his out for $6.75 million at the TransCanada offering price, and Kettering's will be worth $1.77 million.
All the amounts above are subject to adjustments to their holdings, which may have taken place since they were calculated in May.
Several shareholder lawsuits filed against Columbia over the sale to TransCanada took issue with the golden parachutes and exit payments to executives, saying they presented a conflict of interest that biased them in favor of the sale.
But at a Columbia shareholders meeting on June 22, some 80 percent of shareholders voted in favor of the golden parachutes in a non-binding proxy vote. And in a binding vote, approximately 95 percent of shares voted in favor of the merger terms.
The combination of the two companies, effective last Friday, expanded TransCanada's natural gas pipeline network in North America to a total of 57,000 miles. The Calgary, Alberta-headquartered company also has interest in more than 11,400 megawatts of electric generation in Canada and the United States.
TransCanada also is developing an extensive network of liquid-carrying pipelines, including its so-far unsuccessful effort to build the Keystone XL pipeline in the United States.