Andy Vesey steps down as AGL boss

AGL and Mr Vesey came under intense scrutiny in the waky of the company’s decision to shut down its Liddell coal-fired power station in the NSW Hunter Valley in 2022.

The government pressured AGL to keep the power station open for another five to seven years to ensure there would be no power shortfall. AGL has refused to budge.

Mr Vesey’s refusal to do so, saw him lock horns with the government and may have contributed to his earlier than expected exit.

During his last major interview with Fairfax Media, Mr Vesey discussed a parable about a man being forced from a town, drawn from a book about Abraham Lincoln.

It involved a man “who did some egregious breach of etiquette”, was tarred and feathered, and carted out of town, Mr Vesey said.

“As he’s being ridden out of town ... somebody says, ‘how do you like it?” And he says, ‘if it wasn’t for the honour of the thing, I’d prefer to walk'."

Commenting on his departure now, Mr Vesey said it was “a privilege to have had the opportunity to engage in the complex questions of the sustainable transformation of Australia’s energy sector over recent years”.

This change in AGL’s management comes ahead of a possible change in the government's stance on energy policy and climate change as the leadership of the ruling Coalition party changes hands.

A successor may have a chance to reset relations with the federal government Scott Morrison takes over as prime minister.

However, there is also the chance that pressure may be stepped up by an incoming government in order to demonstrate their commitment to addressing energy shortage concerns.

The transition in leadership at AGL was first telegraphed during the company’s full-year results.

However senior AGL staff became concerned several months ago that incessant pressure from the Turnbull government to keep the Liddell power station open beyond its planned closure date in 2022 would result in Mr Vesey's exit from the company.

At the time of the results, chairman Graeme Hunt said the board had stepped up its efforts to find a potential successor to Mr Vesey, examining internal candidates as well as “maintaining an active view of potential external candidates".

Following the release of the results, Mr Vesey dismissed speculation of an imminent transition.

However, I am here today, I'll be here tomorrow and I'll be driving change. I have a lot to still do and plan to do it.

Andy Vesey earlier in August

"Graeme Hunt's comments are fundamentally a governance issue, the board has to take succession planning seriously," Mr Vesey told Fairfax Media at the time.

"However, I am here today, I'll be here tomorrow and I'll be driving change. I have a lot to still do and plan to do it."

He has now stepped down, only a fortnight later.

Commenting on the change in management, Mr Hunt said the process was well underway for months.

“Over recent months we have increased our focus on internal candidates and on maintaining an active view of potential external candidates,” he said.

“As a result, a domestic and international search process including strong internal candidates is well progressed and the board decided to take that process to the next step.”

Mr Hunt thanked Mr Vesey for his leadership.

“At a time of considerable uncertainty in our sector, Andy Vesey has driven our transformation agenda to meet two key strategic imperatives: to prosper in a carbon-constrained future and build customer advocacy,” he said.

The total returns to shareholders during his tenure was more than twice the ASX 200, at 93 per cent. Australia’s second largest energy company Origin saw its shareholder returns fall 24 per cent over the same period.

Mr Redman, AGL’s new interim chief executive, has been with the company since 2007 and took the CFO role in 2012. Damien Nicks, AGL’s general manager for group commercial finance, has stepped into the CFO position.

Home or away

One of the chief criticisms during his time AGL was his regular absences from the country and it is unknown whether Mr Vesey will return to the US.

“He’s never in Australia, this causes a lot of grief internally," one source, requesting anonymity, says. "I’ve no idea how he runs [AGL] from the US,” a source familiar with the company had told Fairfax Media.

“When Vesey was summoned to Canberra [to discuss Liddell] it took him four days to turn up because he was in the US.”

Mr Vesey told Fairfax Media the perception around his absence was from return visits to the US due to family issues.

When he initially accepted the role in 2014 he planned to move his entire family to Australia, however, his wife was embroiled in a custody negotiation over her child from a previous relationship.

The outcome was a shared custody agreement that required her to remain in the US for a portion of the year.

Mr Vesey is likely to remain in Australia at least for a few more months, as he remains an advisor to the board until the end of the year.

with reporting by Peter Hannam