After making a deal with activist investor Carl Icahn, utility AEP cuts its CEO loose

Julie Sloat, who became CEO in January 2023, will be replaced on an interim basis by Benjamin G.S. Fowke III, a member of the company’s board and the former chairman and CEO of Xcel Energy Inc., AEP said Monday. Sloat was among the few women at the head of a major US utility. 

AEP in its statement said it was time to identify a new person to lead its next chapter and that the board would conduct an external search for a permanent CEO.

“It looks like the board was impatient for changes,” said Paul Patterson, a utility analyst for Glenrock Associates LLC. “They wanted a change and this is part of it.” He added that it wasn’t clear to him why the board got rid of Sloat, who in his eyes hadn’t made any major missteps.

AEP shares were up almost 3% in after-hours trading in New York. The company also reported earnings Monday after the market closed, with revenue that trailed analyst estimates. The company will hold a call with analysts on Tuesday to discuss the quarterly results. 

The CEO move comes after AEP said this month that Hunter Gary, an Icahn Enterprises senior managing director, and Henry Linginfelter, a former executive at Southern Company Gas, will join the board.

Some analysts had brought up the possibility of leadership change when Icahn’s involvement in AEP first came to light. 

“We expect Icahn to look for ways to generate multiple accretion, spanning partial asset sales, potential management changes, to perhaps even a sale of the company in its entirety,” analysts at Guggenheim Securities wrote in a research note on Feb. 13. 

In response to a question about whether the CEO change was related to the Icahn agreement on the board, AEP said: “The full board made the determination that now is the right time to identify a new CEO to lead the company.”

Icahn’s involvement with AEP is his most recent foray into American utilities. He has also been involved with FirstEnergy Corp., which was embroiled in a federal corruption case involving nuclear subsidies. Southwest Gas Holdings Inc. agreed in 2022 to sell a pipeline business for $1.5 billion including debt and spin off its construction business in the wake of a bitter battle with Icahn.

Ohio-headquartered AEP has about 5.6 million customers in 11 states. The company had faced regulator pushback during Sloat’s time in the top role, including the rejection of a $1.5 billion sale of its Kentucky operations and a rejection in Texas of its plan to spend $2.2 billion on green energy assets.