Published: 7 June, 2010
Mayo Shattuck's Effect on Constellation Energy
Before Mayo Shattuck became president, chairman and CEO of Constellation Energy, it was in a much different place than it is today. The company's stock had fallen by more than 50 percent during 2001, and electricity prices were down by 20 percent from the winter before. Because of this, morale was very low and the company was not taken very seriously.
Constellation Energy's precursor was the Gas Light Company of Baltimore. It was founded in 1816 by an artist who illuminated his gallery by coal gas-powered lamps. By the mid 1950's, the Gas Light Company of Baltimore became Baltimore Gas and Electric. When the 1980's came around, BGE was a monopolistic company and they would set prices using a "cost-plus" formula.
Regulators would find out from management what the costs of energy generation were, and they would set prices that would yield a specific return on investment. These returns were the "excess profits" with very low risk, but also low return opportunity.
Because of the circumstances, efforts to improve operational effectiveness and incentive to make financial forecasts were not succeeding. Pay grades and career advancement were staff's main concern. It was a goal for every employee at BGE to receive a great pension. The company in general had many entitlements.
Then came Mayo Shattuck.
He came into the organization ready to make Constellation Energy the top energy company through some major changes. Shattuck looked to change everything, from the company's culture to the structure. The focus of the company was being changed: the company would now be performance oriented.
Mayo Shattuck took a big risk, but through his help, Constellation Energy stepped up to eventually become a leading competitive provider of energy. With Mayo Shattuck's drive, energy and ambition, the restructuring of the company was smooth.
Tags: Mayo Shattuck, Constellatin Energy
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