Gary Zheng terminated as LP&L CEO
LUBBOCK, TX (KCBD) - LP&L CEO Gary Zheng has been terminated from his position.
On motion from Clayton Isom, seconded by Charles Dunn, the Electric Utility Board terminated Zheng without cause effective immediately.
The vote to terminate was unanimous without public discussion.
The approval for Zheng's severance package passed 8 to 1, with only Dunn voting against it.
"It's not in the best interest of the tax payers to pay a severance of $500,000," Dunn said, "if we don't have the ability to get that money back."
David McCalla was appointed interim CEO.
"We're confident in his ability to carry that out," said Greg Taylor, EUB chairman.
Back in May, the EUB voted 6-to-3 to place Zheng on leave. This came after allegations of bid-rigging last year, involving proposals to build a new power plant. An investigation found no illegal activity.
The severance agreement releases Zheng from any and all claims "suspected and unsuspected" now and in the future.
The agreement was negotiated by interim CEO and General Counsel Todd Kimbrough along with outside counsel on behalf of the EUB. Kimbrough recommended its acceptance.
"We want to thank Gary for his service," Taylor said. "This was an amicable agreement, but we are ready to move forward with the personnel that we have."
Kimbrough answered questions from board member Charles Dunn indicating that even in the event of criminal charges, there is no possibility of recovering any amount paid to Zheng.
CFO Andy Burcham indicated that almost $700,000 will come from savings in the budget for personnel.
The amount will be paid in a lump sum. It is described as "two years base salary plus accrued benefits."
Jerry Bell, who voted against putting Zheng on administrative leave in May, said, "He (Zheng) does have grounds for a lawsuit and we could potentially spend a lot more money than we're spending. That's the only reason I voted to accept the severance agreement."
However, Dunn believes since Zheng is under investigation by the FBI, no lawyer would advise him to file a lawsuit.
"I think that's been a threat that was overblown by people," he said, "who just wanted this agreement to be signed in the nature that it was signed."
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