Andy Vesey quits as AGL chief executive
Andy Vesey has quit as AGL boss at a crucial time for the energy industry, and just two weeks after he said he planned to stay.
AGL Energy chief executive Andy Vesey is quitting the company after almost four years in the role, after saying only two weeks ago he had “no intentions of going anywhere”.
AGL said current CFO Brett Redman had been appointed interim CEO, effective today, and a search was on for a new boss.
AGL (AGL) gave no reason for Mr Vesey’s departure.
Mr Redman joined AGL in 2007, has been CFO since 2012, and has more than 25 years’ experience in senior roles in blue-chip industrial companies in Australia and North America, AGL said.
Mr Vesey has stepped down from AGL’s board but will remain in an advisory capacity until December to ensure a smooth transition.
By 11.45am (AEST), AGL shares were up 0.8 per cent to $20.55 in a firm Australian market.
Mr Vesey’s departure comes at a time of uncertainty for Australia’s energy industry, following the effective collapse of the Coalition’s planned National Energy Guarantee and the dropping of planned emissions targets.
The policy had enjoyed widespread support from the business community, investors and consumers, and Prime Minister Malcolm Turnbull’s backdown over emission helped fuel the implosion of the government this week amid leadership challenges.
Mr Vesey’s departure has been long rumoured but played down by the company.
He also recently played down speculation of an early exit.
“I am here today, I plan to be here tomorrow,” Mr Vesey told The Australian on August 9.
“I have laid out a 36-month strategy that I am committed to. I have got plenty of work here and for me it is head down and just get on with it. I have no intentions of going anywhere.”
Mr Vesey’s sudden exit comes after more than a year of feuding between AGL and the federal government over the company’s plan to shut one of its coal-fired power plants in 2022 at a time when Australia needs coal and gas-fired plants to back up wind and solar power.
“Whether it’s a new CEO or an existing CEO, it’s a tricky time for the utilities industry,” said Jason Teh, chief investment officer of Vertium Asset Management. “It’s just tough in terms of what the government’s trying to propose.”
The government this week gave the competition watchdog authority to force the big retailers which own generation to spin off assets if they are found to be price gouging.
The Australian Energy Market Operator recently warned that the south-eastern states face heightened blackout risks over the next few years as ageing coal- fired power plants become less reliable.
Recently Mr Vesey has had a testy relationship with Canberra.
In May, AGL turned down a $250 million offer for its ageing Liddell coal-fired energy plant from Chinese-owned Alinta Energy and shunned government pleas to keep the facility open beyond 2022.
Financially Mr Vesey has helped transform AGL and boost its financial performance.
Earlier this month, AGL Energy reported a 28 per cent rise in its full-year underlying profit, bolstered by soaring power prices, although its shares fell as its FY19 forecast came in below analysts’ expectations.
AGL chairman Graeme Hunt said a domestic and international search for a new CEO was “well progressed”.
“The board has decided to take that process to the next step,” he said in a statement.
“That search will now enter a final phase to enable us to complete an appointment.”
Mr Hunt added: “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 carbonconstrained future and build customer advocacy,” Mr Hunt said.
“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 in coming weeks would be “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”.
Mr Vesey said it had been 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,” he said.