AGL facing hunt for new CEO in 2015 after Michael Fraser says he is planning to retire

AGL Energy is hunting for a new chief executive following Michael Fraser’s surprise decision to retire within 13 months after more than eight years in the job.
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AGL shares fell 1.5 per cent to $15.77 on Wednesday as investors digested the news, which comes as the utility is locked in a battle with the competition regulator over the $1.5 billion takeover of NSW power producer Macquarie Generation.

Mr Fraser, who will complete 30 years’ service at AGL this month, is giving the board plenty of time to find a replacement, advising he will step down by June 30 next year.

He said ”this was the right timing” for him to retire from executive life. He wasn’t available to comment and a spokeswoman declined to elaborate.

Mr Fraser steadied AGL after a tumultuous period under his predecessor, Paul Anthony, whose 18-month reign included a battle with Western Australia’s Alinta, a failed $14 billion merger-of-equals proposal put to Origin Energy, and extensive restructuring that saw about 1000 people lose their jobs.

”Fraser has steered back AGL to its core focus,” said Jason Teh, a portfolio manager at Investors Mutual.

”Under his stewardship, whether they win MacGen or not, they will have good capital allocation decisions and hopefully all of those policies would remain when he leaves, and that under a new CEO AGL will continue to do well.”

Chairman Jerry Maycock paid tribute to Mr Fraser, saying he had developed AGL into one of the country’s leading vertically integrated energy companies. ”We will be sorry to see him leave, but absolutely respect his decision.”

Mr Fraser has overseen AGL’s significant growth in the retail electricity market in NSW even after missing out on buying one of the incumbent state-owned retailers to arch-rivals Origin Energy and EnergyAustralia.

He has also steered the company through the full takeover of Victorian coal-fired generator Loy Yang Power, and is seeking to bulk up in coal-fired power through MacGen.

UBS utilities analyst David Leitch, who has been critical of AGL’s expansion into coal-fired power, described Mr Fraser as ”a very safe pair of hands”.

”I don’t agree with every decision he’s made but in general he’s a well-liked guy, a team builder and he hasn’t made many major mistakes, that’s for sure.

”I would particularly say his record regarding AGL’s entry into the electricity business in NSW with the retail side, building it up from first principles, was fantastic.”

AGL is in the process of challenging the Australian Competition and Consumer Commission’s veto of its MacGen purchase in the Australian Competition Tribunal.

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