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Doug Ford Decapitates Canada's Hydro One

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Ontario Premier Doug Ford said he has kept his campaign promise of firing the CEO and replacing the entire board of directors of electric utility Hydro One Ltd. (H.TO) if he was elected.

During his election campaign, Ford had promised to fire CEO Mayo Schmidt of the partially privatized Hydro One amid growing resentment in the province over rising electricity rates.

The increase in electricity rates came even as Schmidt earned a salary of $6.2 million in 2017, prompting Ford to dub him the "Six-Million-Dollar Man."

Hydro One is Ontario's largest electricity transmission and distribution provider with 1.3 million customers. The company was partially privatized by the government in November 2015.

"The CEO and the Board are done. We're going to reduce hydro prices by 12%, so people don't have to choose between heating their homes or putting food on the table," Ford, who was sworn-in as premier on June 29, said on Twitter.

Hydro One said Wednesday that following an approach by the company to the Province of Ontario, they have entered into an agreement for the "orderly replacement" of the board of directors of Hydro One as well as the retirement of Mayo Schmidt as CEO, with immediate effect.

The company added that it has agreed to consult with the province in respect of future matters of executive compensation.

Hydro One said that a new board of directors will be selected by August 15, 2018, and it will initially consist of ten members.

Ontario will nominate four replacement directors, while the remaining six nominees will be identified through an ad hoc nominating committee comprised of representatives of Hydro One's largest shareholders other than the province.

Paul Dobson, Hydro One's chief financial officer, will be the acting CEO of the company until the replacement board of directors can appoint a new CEO.

Hydro One said that Schmidt will not be entitled to severance. Instead, he will receive a $400,000 lump sum payment in lieu of all post-retirement benefits and allowances.

Schmidt would have been entitled to at least $10.7 million in severance if he were to be removed from his job by the board of directors.

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