How hard is it to be fired from the top reaches of corporate America? Consider the strange case of Mayo A. Shattuck III, chairman and chief executive of Baltimore-based Constellation Energy.
Commodity bets with borrowed money and market turmoil nearly pushed Constellation into bankruptcy in September.
The company's stock has fallen 75 percent since the beginning of 2008. Constellation shares have delivered about the same return as a broad basket of U.S. electricity and utility stocks since Shattuck took over in late 2001.
Constellation said this week that it was cutting its dividend by half, reducing income for thousands of Marylanders who bought the stock back when it was a reliable, boring utility called Baltimore Gas & Electric. The company lost $1.4 billion last quarter. It's laying off 800 people.
But not the guy at the helm when the sloop hit the reef.
"What is the rationale for keeping Mayo Shattuck as CEO and chairman," I asked as many Constellation directors as I could track down, "given last year's problems, the hit to shareholder value and the unambiguous repudiation of the direction he was taking the company?"
Most didn't respond. A couple referred me to Constellation's media relations department, which works for Shattuck. But I wanted to hear from Shattuck's direct bosses, who met recently to discuss the CEO's future.Two spoke on the record - Douglas Becker, head of Laureate Education, and Freeman A. Hrabowski III, president of the University of Maryland, Baltimore County. Shattuck also weighed in on his own behalf.
The case for Shattuck is this: While Constellation shareholders have suffered, the CEO has learned from his mistakes and prevented the worst. Few foresaw the financial panic that brought Constellation's stock and credit ratings crashing in September.
In any event, nobody but Shattuck was smart enough to bring Constellation through the crisis and guide it through what is still great uncertainty, his supporters say.
"I'm not saying he is blameless, and I don't think he is saying he is blameless," Becker said. "But he has absolutely the skill and the heart and the best interests of everybody in mind. I think he's the best guy to lead us through this period."
Constellation's board has met without Shattuck in recent months and discussed whether he is the right boss, Becker said. While there was no thumbs-up or thumbs-down vote, Becker said, there was "overwhelming" sentiment to keep him.
