By Angela Macdonald-Smith
AGL Energy has named Andrew Vesey, the chief operating officer of US utility AES Corporation as its new chief executive, replacing Michael Fraser who advised in May he would step down in 2015.
The surprise appointment of the former Ernst & Young partner follows a six-month global search process that also considered internal candidates.
AGL and its fellow utilities did most of the heavy lifting but it wasn't enough to boost the ASX. Credit: Bloomberg
The New York-educated businessman has some Australian connections, being a former chief executive of Melbourne network owner Citipower. AGL chairman Jeremy Maycock said he was "very well credentialled" to manage AGL's diverse portfolio of assets and vertically integrated businesses, which has been expanded this year with the $1.5 billion takeover of NSW power generator Macquarie Generation.
Mr Maycock said Mr Vesey "brings a strong understanding of generation technologies and operational excellence programs" across a variety of types of generation and "also has experience in research, development and commercialisation of new technologies that are likely to shape the future of electricity markets".
"His experience in creating value in energy companies with evolving business models will be an advantage to AGL," Mr Maycock said.
Mr Vesey has held several roles at AES, including leading the utility's Latin American and African business, and head of its global business transformation unit. He was not available for comment.
Mr Fraser is retiring after more than eight years as CEO and more than 30 years with the company in total. He had advised he would step down by June 30 next year.
Mr Fraser won plaudits from the market for AGL's growth in electricity retailing in NSW after it was outbid by arch rivals Origin Energy and Energy Australia for state-owned retailers sold off in the first wave of the state's power privatisation.
Internal candidates named by some investors and analysts as potential replacements for Mr Fraser included Stephen Mikkelsen, the head of retail and a former chief financial officer at AGL.
Mr Vesey will be on a fixed salary of $1.9 million a year, which could more than double with short-term and long-term incentives. He will join AGL on January 12 and take over from Mr Fraser after the half-year results on February 11.
He will be paid "reasonable" relocation expenses, and 73,000 shares plus $1 million to cover tax costs arising from the share award.