THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, September 16, 1995 TAG: 9509160261
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: Medium: 59 lines
Burying the hatchets that threatened to cut their careers short, the chief executives of Dominion Resources Inc. and its Virginia Power subsidiary agreed Friday to work together for another three years.
Dominion Chairman Thomas E. Capps, 59, and Virginia Power President James T. Rhodes, 54, accepted an offer by their companies' boards to extend their tenures.
Under an agreement in March, the two men were to have retired in July 1996. Their disagreements were at the heart of a rancorous public feud between the parent and its subsidiary.
Dominion and Virginia Power board members indicated Friday that the two executives were now working together so well that there was no need to replace them. They said that the extension of their contracts should signal, once and for all, that the conflicts within the corporation had ebbed to normal levels.
``We are announcing more than anything else the resumption of normalcy in the company,'' said Kenneth A. Randall, a retired corporate executive from Williamsburg who sits on Dominion Resources' board.
After Rhodes complained to Virginia Power directors early last year about what he saw as inappropriate interventions by Capps into the utility's affairs, the State Corporation Commission ordered an investigation. The commission said it was concerned that the squabbling would cause a mass exodus of key Virginia Power personnel.
The disagreement also helped drag down Dominion Resources' stock price, some analysts said.
In August 1994, the company and its subsidiary reached a settlement that increased the number of directors serving on both boards and named a longtime Virginia Power executive, Tyndall L. Baucom, as Dominion's president and chief operating officer.
Baucom was to be a buffer between Capps and Rhodes. Another such buffer, a special committee of members of both companies' boards, also was established.
But as part of the changes announced Friday, Baucom retired immediately and the special committee was abolished. With differences patched up, the committee ``didn't have anything to do,'' Randall said.
There was no exact date on which Capps and Rhodes started seeing eye to eye, said William G. Thomas, an Alexandria lawyer who serves on Virginia Power's board.
He said, however, that Virginia Power's aggressive implementation this year of a major cost-cutting program ``probably helped.''
Dominion Resources executives like Capps were said to have been previously unimpressed by Virginia Power's cost-cutting pace.
An evolution in the boards' own view of the future also led them back to Capps and Rhodes, Dominion director Randall said. The directors realized it would be difficult finding adequate replacements for the two executives and, therefore, decided to ``keep the team that was working,'' he said. by CNB