Hydro One Inc. has announced that it has entered into an agreement with the Government of Ontario for the purpose of the orderly replacement of the board of directors of Hydro One and Hydro One Inc. and the retirement of Mayo Schmidt as the chief executive officer effective immediately.
Other key highlights of the agreement with the Province include:
- Consistent in principle with the ability of the Province to remove the entire board of directors pursuant to the Governance Agreement dated as of November 5, 2015, each of the current directors of Hydro One will resign and be replaced by nominees identified as set out below.
- The new board of directors will initially consist of 10 members. Consistent with the Governance Agreement, the Province will nominate four replacement directors and 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.
- The new board of directors will be responsible for appointing a new chief executive officer who will also be appointed as the eleventh member of the replacement board of directors.
- Hydro One has agreed to consult with the Province in respect of future matters of executive compensation.
- The replacement directors will serve until Hydro One’s next annual meeting or until they otherwise cease to hold office.
Paul Dobson, Hydro One’s chief financial officer, has been appointed as acting chief executive officer until such time as the replacement board of directors, once constituted, can appoint a new chief executive officer.
“I would like to express thanks on behalf of the entire board of directors and the employees of Hydro One to Mayo Schmidt for his many contributions to the Company. He has exhibited strong and effective leadership throughout his tenure as CEO in guiding the transformation of Hydro One to a publicly traded company.
We believe that the agreement we have reached with the Province of Ontario, which provides for an orderly transition of the board of directors and CEO succession, is in the best interests of Hydro One and its various stakeholders and provides stability and clarity to Hydro One’s governance and management structure going forward,” said David Denison, Chair of Hydro One.
Hydro One has committed to completing the transition process to a new board of directors by August 15, 2018. In connection with Schmidt’s retirement, he will receive amounts consistent with Hydro One’s retirement policies and his employment agreement as previously disclosed and will not be entitled to severance. Schmidt will receive a $400,000 lump sum payment in lieu of all post-retirement benefits and allowances