Just weeks after billionaire activist investor Carl Icahn secured two seats on American Electric Power Co.’s board of directors, the company fired its CEO whose tenure lasted less than 14 months.
Julie Sloat, who became CEO in January 2023, will be replaced on an interim basis by Benjamin G.S. Fowke III, a member of the company’s board of directors and former president and CEO of Xcel Energy Inc., AEP said Monday. Sloat was among the few women at the head of a major U.S. utility company.
AEP in its statement said the time has come to identify a new person to lead the next chapter and that the board will conduct an external search for a permanent CEO.
“It appears the board was eager for changes,” said Paul Patterson, utilities analyst for Glenrock Associates LLC. “They wanted a change and this is part of it.” He added that it wasn’t clear to him why the board got rid of Sloat, who in his eyes had made no major missteps.
AEP shares rose nearly 3% in after-hours trading in New York. The company also reported earnings Monday after the market close, with revenue falling short of analysts’ estimates. The company will hold a call with analysts on Tuesday to discuss its quarterly results.
The CEO’s move comes after AEP said this month that Hunter Gary, a senior managing director at Icahn Enterprises, and Henry Linginfelter, a former Southern Company Gas executive, will join the board.
Some analysts had raised the possibility of a leadership change when Icahn’s involvement in the AEP first came to light.
“We expect Icahn to seek ways to generate multiple accretions, ranging from partial asset sales, to potential management changes, to perhaps even selling the company in its entirety,” analysts at Guggenheim Securities wrote in a research note of February 13th.
In response to a question about whether the CEO change was related to Icahn’s board appointment, AEP said: “The entire board has decided that now is the right time to identify a new CEO at leadership of the company”.
Icahn’s involvement with AEP represents his most recent foray into American utilities. He also was involved with FirstEnergy Corp., which was involved in a federal corruption case involving nuclear subsidies. Southwest Gas Holdings Inc. agreed in 2022 to sell a natural gas pipeline business for $1.5 billion including debt and to spin off its construction business in the wake of a bitter battle with Icahn.
Ohio-based AEP has about 5.6 million customers in 11 states. The company faced resistance from regulators during Sloat’s time at the top, including rejection of a $1.5 billion sale of its assets in Kentucky and rejection in Texas of its plan to spend 2, $2 billion in green energy assets.