- The Washington Times - Saturday, March 21, 2009

BALTIMORE (AP) | Constellation Energy Group Inc. dropped a plan Friday for up to $32 million in performance and retention payments to key managers that was to be a part of an upcoming deal with French power giant EdF.

Maryland Gov. Martin O’Malley, a Democrat, state legislators and customers had harshly criticized the plan.

Constellation Energy Chief Executive Officer Mayo Shattuck said the issue had become “a significant distraction” from the benefits for Maryland from the EdF partnership. Mr. Shattuck also said that since December, the fundamental outlook for Constellation Energy has improved.

Baltimore-based Constellation Energy supplies energy products and services to wholesale and retail electric and natural gas customers. It delivers electricity and natural gas through BGE, its regulated utility in central Maryland.

EdF plans to buy half of Constellation Energy’s nuclear business for $4.5 billion.

In December, Constellation Energy was concerned that “the potential instability of the work force could lead to retention issues,” particularly in the areas of safety and reliability. That prompted the incentive offer, under which EdF would have made payments tied to what 120 senior executives would have earned based on their performance if an earlier deal with Warren Buffett’s MidAmerican Energy Holdings Co. had gone through.

“Since that time, there has been a tremendous amount of concern over employee compensation throughout the country,” Mr. Shattuck said. The Constellation Energy program “has been misconstrued by some as a potential cost to our BGE customers, who we recognize are struggling with high energy bills,” he said.

“The funds for this program were coming entirely from EdF and would not have impacted BGE rates,” Mr. Shattuck said. A company spokesman had said the payments were not bonuses, and that employees who left early would get nothing.



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