Hydro One has announced the retirement of its CEO and the replacement of its board, after coming to an agreement with the Ontario government.
Effective on Wednesday, Mayo Schmidt will be retiring as the hydro company's chief executive officer and will not be receiving a severance. He is, however, entitled to a $400,000 lump sum payment in lieu of his post-retirement benefits and allowances.
Premier Doug Ford promised to fire Schmidt during his provincial election campaign and dubbed him the $6-million man due to his annual salary and bonuses.
"We promised the people of Ontario that we would lower their hydro rates and that started by addressing leadership at Hydro One," Ford said in a Tweet on Wednesday. "The CEO and the board are done. We’re going to reduce hydro prices by 12%, so people don’t have to choose between heating their homes or putting food on the table."
Each of the current directors who sit on Hydro One's board will also be resigning and all board members have agreed to forego any compensation for their service after June 30, 2018.
"Our government was elected on a promise to lower electricity bills for the people of Ontario. This included a promise to address governance at Hydro One," said Minister of Energy Greg Rickford, in a statement. "Given the critical importance of Hydro One to our province's electricity system, our government will be closely engaging in the leadership transition at Hydro One to ensure the stability of the system is preserved and consumers are protected."
The new board of directors will consist of ten members, four of which will be nominated by the province. The board selection process is expected to be completed by August 15. The new board of directors will then be responsible for appointing a new CEO, but Hydro One has agreed to consult with the province to determine the position's salary.
"We will play a key role in appointing the new board, and will expect it to act in the public's interest," said Rickford. "Our government has [also] prepared legislation that, if passed, will improve transparency and accountability at Hydro One. We will introduce this legislation during the upcoming sitting."
In the meantime, Paul Dobson, Hydro One's chief financial officer, has been appointed as the company's acting CEO.
"After years of rising electricity bills, this is a step towards our main goal — bringing down electricity rates for all Ontarians," Rickford added.