CEG official Smith resigns

CFO since '01 seeks more family time

May 19, 2007|By Paul Adams | Paul Adams,Sun reporter

E. Follin Smith, who in six years as chief financial officer helped steer Constellation Energy Group from a shaky, debt-laden power company to No. 119 on the Fortune 500, announced yesterday she is stepping down to spend more time with her family.

Smith, 47, one of the most powerful women in corporate Baltimore, will be replaced by John R. Collins, currently chief risk officer of the $19.3 billion energy conglomerate. Her resignation took effect immediately, though she will act as a consultant to the company until February. The announcement was made hours after the company held its annual meeting for shareholders.

The resignation comes as Constellation's shares and profits are at near-record highs even as it deals with regulatory and political fallout from a more than 70 percent rate increase for electric customers of its Baltimore Gas and Electric subsidiary.

Smith's cool demeanor and penchant for interpreting complicated financial data for industry analysts helped calm investors as the company dealt with multiple crises over the past year.

Constellation fought to preserve its reputation on Wall Street in the midst of attempts in the General Assembly to limit the BGE rate increase and place conditions on Constellation's proposed $12 billion merger with FPL Group Inc. of Juno Beach, Fla., which ultimately collapsed.

Smith, who made $561,000 in salary and $4.5 million in bonus in 2006, was in line to become CFO of the merged company.

"I think she was well thought of insofar as appearing to be quite knowledgeable and effective in dealing with the financial issues associated with a somewhat complex energy company," said Paul Patterson, an analyst with Glenrock Associates in New York.

Analysts said the news was unexpected but was unlikely to shake investor confidence in the company.

Smith, who commutes to Baltimore from her home in Lancaster, Pa., said in a statement that the decision to step down was difficult but comes at a time when Constellation's prospects have "never been brighter."

"I've decided that I want to be more actively involved with my children at this stage in their lives and, for right now, want to control my calendar more than is possible as the chief financial officer of a publicly traded company."

Smith took over as CFO and chief administrative officer in June 2001, when Constellation's revenue was barely a fifth of what it is now. At that time, the company faced skeptical analysts, who struggled to figure out the company's complicated business model and balance sheet. Later that year, Mayo A. Shattuck III was named chief executive officer, marking the beginning of the company's steady rise.

"Follin has been a key leader in Constellation Energy's transformation during the past 5 1/2 years," Shattuck said in a statement. "While we didn't want to see her go, we support her decision and wish her well ... "

Collins joined BGE in 1988, and in 1997 became CFO of Constellation Commodities Group, a Constellation subsidiary. He was named chief risk officer in 2002.

The management change came after shareholders re-elected the company's entire 11-member board in keeping with a change in company bylaws, which requires members to stand for election annually rather than serving staggered three-year terms. The move was aimed at increasing board accountability, which has become a popular cause among shareholder rights groups.

Shattuck gave a presentation charting the company's five-year growth from No. 421 on the Fortune 500 to No. 119.

After the hour-long meeting, the board declared a quarterly dividend of 43.5 cents per share payable July 2 to shareholders of record as of June 11. The company's shares climbed $1.03, or 1.1 percent, to $94.97 in trading yesterday.

paul.adams@baltsun.com

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