At Hydro One Ltd.'s last annual meeting, Progressive Conservative candidate Doug Ford joined protesters on the sidewalk outside the gathering to attack the utility’s CEO and his $6-million pay package.
Mr. Ford, now Ontario’s Premier, didn’t come to Hydro One’s shareholder meeting this year, but the results of his successful, populist campaign were clear. The utility’s new board and boss used the gathering to announce modest growth plans, along with better-than-expected financial results that included a roughly $7-million quarterly dividend increase. The dividend hike puts an additional $13-million or so into provincial coffers annually, as the Ontario government owns a 47-per-cent stake in the partly privatized company.
Toronto-based Hydro One introduced newly named chief executive Mark Poweska to shareholders at Thursday’s meeting, one day before the former BC Hydro executive formally takes the reins. Mr. Poweska’s brief speech focused on serving customers in Ontario – and made no mention of the U.S. expansion strategy introduced by his predecessor, Mayo Schmidt. Speaking in a methodical, friendly tone, Mr. Poweska said he is joining the utility “at a critical time in Hydro One’s transformation into a customer-focused and innovative company, focused on safety, driving down costs and delivering great value to customers, communities and shareholders.”
His blue suit was decorated with green and purple ribbons in tribute to five Hydro One employees who died on the job in the past two years, as were the lapels of other executives and board members. In response to a shareholder question on potential changes in strategy, the new CEO said he plans to spend the next four months working with the board, employees, major customers and other stakeholders before speaking publicly about his plans.
The job of summing up a year that saw Mr. Schmidt leave and the entire board resign after Mr. Ford’s election win, along with the scrapping of a planned $4.4-billion takeover of U.S. utility Avista Corp., fell to Hydro One chairman Tom Woods, who was appointed by the province in August. In response to a shareholder question about the state of Hydro One’s relationship with its largest shareholder, Mr. Wood said he was “very optimistic” that the company’s leaders can work constructively with the government, adding that the board has an “open dialogue” with Mr. Ford and his team.
After Mr. Schmidt left, the government capped the compensation of the CEO at $1.5-million and cut pay packages for all senior employees. At BC Hydro, a Crown corporation, Mr. Poweska made $405,720 last year. Several Hydro One executives departed this spring, and interim CEO Paul Dobson is expected to leave this summer after just more than a year with the company. On Thursday, the utility named Chris Lopez as chief financial officer.
Hydro One announced Thursday that it made a profit of $311-million, or 52 cents a share, in the most recent quarter, excluding $140-million in costs associated with the cancelled Avista takeover, compared with a profit of $210-million, or 35 cents a share, in the same period last year. The results were well above the 45 cents a share forecast by analysts. Hydro One increased its quarterly dividend by 5 per cent and, in a news release, Mr. Poweska said: “This increase reflects the strong fundamentals of the business and confidence in our continued ability to produce solid financial results.”
Hydro One delivers electricity to 1.4 million customers over a 30,000-kilometre network, almost twice the size of BC Hydro’s transmission system.
“Hydro One continues to focus on improving operational efficiency,” said analyst David Galison at Canaccord Genuity Corp., who raised his target price on the stock to $22 from $21.50. In a report, Mr. Galison said: “The increase in our target price is due to higher earnings, benefiting from lower taxes.”