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TECO's recovery elicits praise

Stock gains were below the Dow Jones average, but last year's rancor was replaced with shareholders' optimism.

By LOUIS HAU
Published April 28, 2005

TAMPA - When TECO Energy Inc. chairman and chief executive Sherrill Hudson invited questions from the audience during the company's annual shareholders meeting Wednesday, 76-year-old Tampa resident John Etten walked over to a nearby microphone.

Etten, a retired University of South Florida professor who has held TECO stock for more than a decade, told the gathering that he used to be disappointed in the Tampa utility's leadership.

But not any more.

"I just want to thank you, Mr. Chairman, for turning this company around," he said, adding that, "You have certainly done the job. I congratulate you and commend you."

As Etten returned to his seat, the roughly 80 other shareholders in the room applauded.

What a difference a year makes.

When TECO held its 2004 shareholders meeting at the Hilton Tampa Airport Westshore Hotel, one irate speaker after another excoriated then-chairman and chief executive Robert Fagan and the TECO board for leading the company into massive, ill-timed investments in unregulated wholesale power plants. The result was hundreds of millions of dollars in losses, a steep decline in TECO's stock price and a shrunken quarterly dividend.

Since then, the company has continued to take painful steps, including writeoffs last year totalling more than half a billion dollars, to extricate itself from its disastrous wholesale power business.

Meanwhile, TECO has seen a heartening recovery in its stock during the past year, although it has fallen short of the gains notched by many other utilities. TECO's stock closed Wednesday at $16.54, up 23 percent from a year ago. (The Dow Jones Utilities Average has surged 33 percent during the same period.)

Perhaps just as importantly for the company's relationship with its shareholders, Fagan is gone, having been replaced in July by TECO board member Hudson, a retired senior executive with the accounting firm Deloitte & Touche.

Hudson's affable and forthright manner represents a shift in tone from his more formal predecessor.

Fagan abruptly called an end to last year's shareholders meeting after heated remarks by some attendees. By contrast, when a shareholder complained Wednesday of shoddy customer service, Hudson asked those in attendance to notify the company of any such problems, promising that "every letter, e-mail and phone call" would be processed promptly.

Former TECO engineer Joe Robinson took the mike to laud the company's hurricane-recovery work and to urge the board to add an African-American to its board. The company's lone black director, former Texaco Inc. treasurer Ira Hall, stepped down in May 2004.

Hudson said the company has enlisted the help of an executive-search firm, vowing the company would have an African-American on the board by year's end.

Later, shareholder Joseph Fuentes, 76, reminded Hudson that for all of the company's efforts during the past year, it has a long way to go before it fully restores the value of his TECO shares.

Hudson said TECO executives were "keenly aware that we have an obligation to every shareholder" and that restoring shareholder value is a top priority.

After the meeting, Peter Lalor, a 55-year-old TECO shareholder from Virginia Beach, Va., said he was impressed by Hudson's performance. "I think obviously the new leadership is pulling the company in the right direction."

[Last modified April 28, 2005, 01:18:21]