Duke Energy Corp. shareholders last week approved a non-binding resolution calling for the annual election of board members. Initially opposed by the board of directors, CEO Paul Anderson said the vote will not be opposed.

“We will abide by the will of the shareholders, and as chairman of the board of directors, I will work with the board to make sure those steps are taken,” Anderson said.

The proposal won by 63%, but the election rules cannot be revised unless the company charter is revised, which is not expected until the meeting in 2005. Anderson said changes to the charter require approval by 80% of the shareholders.

Opposition to the proposal suggested that an annual vote would erode the board’s continuity and experience and make Duke more vulnerable to unfair treatment in takeover situations. Supporters, however, said it was designed to increase accountability.

Shareholders also re-elected four board members, including Anderson, Ann M. Gray, Michael E.J. Phelps and James T. Rhodes. Shareholders also ratified the appointment of Deloitte & Touche LLP as Duke’s auditors for 2004.

Anderson, who became CEO last November, told about 300 shareholders in Charlotte, NC that Duke was committed to long-term investors, and said his interests and those of the board and management are aligned with the shareholders. Duke also celebrated its 100th anniversary at the meeting.

Anderson pointed to the company’s announcement earlier this year that it would maintain its $1.10 annual dividend as an initial reflection on how Duke would be managed going forward (see NGI, Jan. 12).

“We didn’t listen to the analysts and the hedge funds and the day traders — we listened to our long-term investors,” Anderson said. “We decided to maintain the dividend at $1.10 per share and concentrate on producing reliable income for our shareholders.”

Anderson also noted that management incentives this year are triggered by earnings enough to support the dividend and that his entire Duke compensation will be tied to the stock price. He said Duke is on track to reduce debt by $3.5-4 billion in 2004, and is well ahead of its asset sales target of $1.5 billion.

“I can sum it up by saying we’ve turned the corner,” Anderson said. “Momentum is working for us, instead of against us.”

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