By: Donald V. Watkins
Copyrighted and Published on April 19, 2023
An Editorial Opinion
At the Southern Company board of directors’ special meeting on April 17, 2023, CEO Thomas Fanning rallied the troops to remain publicly united in the face of two separate criminal complaints (i.e., alleging a massive accounting fraud scheme and racketeering conduct under state of Georgia criminal statutes and federalcriminal laws) and one complaint with the U.S. Nuclear Regulatory Commission (alleging that the Southern Company is “unfit” to hold its Owner/Operator’s license for Units 3 and 4 at the Vogtle Nuclear Power Plant in Waynesboro, Georgia).
Fanning encouraged the troops to circle the wagons around him, as it has done since construction cost overruns started at the company’s coal gasification plant in Kemper, Mississippi ten years ago.
Even though the Southern Company has not been profitable in years and is living off of borrowed money, the board of directors maintained and perpetuated its “fake it ‘til you make it” front by declaring a $0.70 per share quarterly dividend. The dividend was a 2.9% increase from its last quarterly dividend of $0.68.
Like the previous dividends in recent years, it was paid from borrowed money, instead of earnings. It was the 22nd straight quarterly consecutive dividend increase -- which is a red flag, in and of itself.
A Wall Street Version of Harry Houdini
Fanning is one board meeting away from walking out the door with a retirement package valued at up to $100 million. His last meeting is scheduled for May 24, 2023.
Fanning is the only CEO of a New York Stock Exchange/Fortune 500 company that built a brand new $7.5 billion energy production facility – the Kemper project in Mississippi -- that was $4.5 billion over budget and so defective that it had to be demolished in 2021 before the facility was ever placed into commercial service.
Yet, Thomas Fanning was not fired. Like the great escape artist, magic man, and stunt performer Harry Houdini, Fanning escaped a firing.
Fanning has mismanaged construction costs at the Vogtle Nuclear Power Plant Units 3 and 4, which was originally estimated to cost $14 billion dollars, to the point that they have skyrocketed to $35 billion dollars today.
Units 3 and 4 were originally scheduled to be placed in service in April 2016 and April 2017, respectively. The Southern Company’s construction of Units 3 and 4 has been so shoddy and so mismanaged that there is no concrete date when these two defective nuclear power Units will pass final inspection and be placed into service.
The Vogtle construction project has been compared to Three Mile Island – the only U.S. nuclear power plant to experience a meltdown and closure. This project is to the nuclear power industry what “lemon cars” are to the automobile manufacturing industry, except a meltdown at Vogtle would be a catastrophic Three Mile Island level event in-waiting.
Yet, Fanning has not been fired. His Houdini magic still works on his board members, a couple of whom privately question whether Fanning is a Bernie Madoff “con man.”
Instead, with a Jim Jones-like power of persuasion, Fanning has duped a majority of his board members into believing that a CEO of a historically unprofitable publicly traded company who has lost $28 billion on three defective construction projects during a ten-year period is doing such a great job that he actually deserves an retirement package from the company of up to $100 million.
I do not share this view, and I am not alone. There are "insiders" in the executive suite of the Southern Company's headquarters in Atlanta who share my view in this regard. Fanning's retirement package constitutes corporate irresponsibility and recklessness in the first degree.
Between today and May 24, 2023, I will be working to encourage the Fulton County, Georgia District Attorney’s Office to freezing Thomas Fanning‘s exit package until District Attorney Fani T. Willis has had the time to properly investigate the criminal complaint that was filed against Southern Company executives with her office on April 13, 2023. Fanning's exit package is tainted by the massive $27 billion accounting fraud scheme at his company.
Freezing Fanning's $100 million retirement “payout” is a better option than trying to claw it back after Fanning exits the company.