Reliant Energy Inc., a Texas power retailer that has posted losses in 12 of the past 16 quarters, said Joel Staff will retire as chief executive officer this year and will be replaced by Chief Financial Officer Mark Jacobs.
Staff, 63, will remain on the company's board as non- executive chairman, Houston-based Reliant said today in a statement. He has been CEO since April 2003 and on the Reliant board since October 2002. Staff's retirement will be effective when Reliant holds its annual shareholders meeting in May.
Jacobs, 44 and a former managing director at Goldman, Sachs & Co., joined Reliant in 2002. Staff steered Reliant clear of bankruptcy by selling assets and cutting jobs after a drop in wholesale power prices led to losses.
``Joel has completed, really, what he came to Reliant to do,'' Jacobs said today in a telephone interview.
The company cut its debt (RRI:US) to $3.1 billion at the end of 2006 from $7.8 billion at the end of 2002, Jacobs said. Reliant's wholesale power business will benefit from a tightening supply- demand situation, he said. A new strategic plan will be discussed in March.
``I think we have a tremendous opportunity to take this company to the next level and really create a company that is a true industry leader in the power industry,'' Jacobs said.
Jacobs is ``capable of handling the new role,'' said Michael Lapides, an analyst at Goldman Sachs in New York who has a ``buy'' rating on Reliant shares and doesn't own any. He called the transition logical and said Staff will continue to help guide the company as chairman.
Brian Landrum, 45, will be promoted from executive vice president to chief operating officer, Reliant said. The company will consider internal and external candidates to replace Jacobs as CFO.
Shares of Reliant fell 14 cents to $16.24 in New York Stock Exchange composite trading. Before today, the stock had climbed 15 percent this year.
Reliant is the second-largest power retailer in Texas, ranking behind Dallas-based TXU Corp.
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