TVA’S top exec gets 10 times Obama’s pay­check

The Washington Times Weekly - - Politics - BY JIM MCEL­HAT­TON

The Ten­nessee Val­ley Author­ity is owned by the fed­eral government and pro­vides elec­tric­ity to mil­lions of cus­tomers in seven states, in­clud­ing Vir­ginia, but the salaries it pays its ex­ec­u­tives aren’t any­thing like what most fed­eral work­ers can imag­ine.

Last year, the TVA paid more than $4 mil­lion just to its top ex­ec­u­tive, about 10 times what Pres­i­dent Obama makes, while an­other ex­ec­u­tive’s per­sonal for­tunes rose by more than 50 per­cent to well over $3 mil­lion.

The util­ity de­tailed the gen­er­ous ex­ec­u­tive com­pen­sa­tion in a re­cent fil­ing with the Se­cu­ri­ties and Ex­change Com­mis­sion, prompt­ing quick crit­i­cism from one Repub­li­can mem­ber of Congress from Ten­nessee who called the pay ex­ces­sive.

But the pay­outs, in­clud­ing salary, re­tire­ment and bonus com­pen­sa­tion, are per­fectly le­gal be­cause the self-fi­nanced TVA, for the most part, is un­re­strained by com­pen­sa­tion caps im­posed across the rest of the fed­eral government.

In its SEC fil­ing, the util­ity also noted that un­der its poli­cies, com­pen­sa­tion should be based on an an­nual sur­vey of pre­vail­ing com­pen­sa­tion for sim­i­lar po­si­tions in pri­vate in­dus­try. By that mea­sure, util­ity of­fi­cials say, TVA ex­ec­u­tives are un­der­paid com­pared with pri­vate-sec­tor coun­ter­parts.

In­deed, the top ex­ec­u­tive for Pepco Hold­ings Inc., the util­ity that sup­plies elec­tric­ity for much of the Washington re­gion, re­ceived nearly $7.2 mil­lion in salary and other com­pen­sa­tion last year, ac­cord­ing to SEC fil­ings. Still, Pepco doesn’t have the close re­la­tion­ship be­tween the fed­eral government and TVA, whose direc­tors are pres­i­den­tially ap­pointed.

Rep. John J. Dun­can Jr., Ten­nessee Repub­li­can, called the TVA com­pen­sa­tion “ridicu­lously ex­ces­sive” in a state­ment his of­fice is­sued af­ter the SEC fil­ing.

“To give pay raises as high as 50 per­cent in times of rel­a­tively low in­fla­tion is just wrong and un­fair to rate pay­ers,” he said.

Call­ing on Mr. Obama to ap­point “very fis­cally con­ser­va­tive peo­ple” to the TVA’s board of direc­tors, the law­maker also noted that al­most all fed­eral em­ploy­ees have had their salaries frozen as many in the pri­vate sec­tor are fac­ing salary cuts.

TVA of­fi­cials is­sued a state­ment de­fend­ing the pay package for the re­tir­ing chief ex­ec­u­tive, Tom Kil­gore.

TVA Chair­man Wil­liam B. San­som said Mr. Kil­gore’s com­pen­sa­tion re­mains “near the bot­tom in to­tal com­pen­sa­tion among all util­i­ties,” based on a re­view of mar­ket data.

“As a board, we know TVA must hire and re­tain peo­ple with ex­pe­ri­ence to op­er­ate and main­tain a com­plex power sys­tem,” Mr. San­som said in a state­ment. “TVA op­er­ates one of the na­tion’s largest pub­lic util­ity sys­tems and com­petes with other in­vestor owned util­i­ties to sus­tain op­er­a­tional ex­cel­lence.”

But Mr. Dun­can said TVA ought to be able to at­tract ex­ec­u­tives with­out paying such high com­pen­sa­tion.

“Be­cause East Ten­nessee is one of the pop­u­lar places to live in the en­tire coun­try, TVA can get out­stand­ing peo­ple at its top level with­out paying th­ese ex­tra­or­di­nary salaries,” he said.

Ac­cord­ing to SEC fil­ings, Mr. Kil­gore’s to­tal com­pen­sa­tion for fis­cal 2012 came to $4,029,562, up from the $3,950,560 he made in 2011.

For both years, the bulk of the money came in the form of in­cen­tive bonuses and de­ferred com­pen­sa­tion. Mr. Kil­gore’s base salary dropped slightly from $853,269 to $850,000.

Mr. Kil­gore an­nounced his re­tire­ment ear­lier this year. He be­came chief ex­ec­u­tive in 2005, and Mr. San­som cred­ited him with “a vi­sion that em­pha­sizes low rates, re­li­able power gen­er­a­tion and en­vi­ron­men­tal ste­ward­ship.”

“To give pay raises as high as 50 per­cent in times of rel­a­tively low in­fla­tion is just wrong and un­fair to rate pay­ers,” Rep. John J. Dun­can Jr., Ten­nessee Repub­li­can, said.

Kim­berly S. Greene, ex­ec­u­tive vice pres­i­dent and chief gen­er­a­tion of­fi­cer, re­ceived nearly $2.4 mil­lion in 2011, but her over­all com­pen­sa­tion in­creased to more than $3.5 mil­lion in fis­cal 2012.

The TVA’s chief fi­nan­cial of­fi­cer, John M. Thomas III, re­ceived $2.2 mil­lion over­all, com­pared with $1.6 mil­lion the pre­vi­ous year, while over­all earn­ings for the chief nu­clear of­fi­cer, Pre­ston D. Swaf­ford, rose from about $1.9 mil­lion to nearly $2.3 mil­lion.

Ex­ec­u­tives also can re­ceive perks such as per­sonal fi­nan­cial coun­sel­ing and a bi­weekly al­lowance to­ward the pur­chase or lease of a ve­hi­cle.

The TVA be­gan in 1933 un­der Pres­i­dent Franklin D. Roo­sevelt, but fed­eral ap­pro­pri­a­tions dwin­dled over the years. Since 1999, the TVA had funded its op­er­a­tions al­most en­tirely from the sale of elec­tric­ity and the sales of se­cu­ri­ties and lease ar­range­ments, ac­cord­ing to SEC fil­ings.

The TVA re­ported $11.2 bil­lion in rev­enue in 2012, com­pared with $11.8 bil­lion in 2011 and $10.8 bil­lion in 2010. The util­ity also re­ported net in­come for the 2012 fis­cal year of $60 mil­lion.

Board mem­bers, who set com­pen­sa­tion, are ap­pointed by the pres­i­dent. One re­cent nom­i­nee in­cludes former Demo­cratic can­di­date for gov­er­nor of Ten­nessee, Mike McWherter.

But board mem­bers’ salaries are frozen be­cause of a two-year freeze on ex­ec­u­tive pay in fed­eral agen­cies.

As of Sept. 30, the base stipend for the part-time board mem­bers was $48,900, though they also are re­im­bursed for lodg­ing, travel and meet­ing ex­penses.

They say she’s un­der­paid: Kim­berly Scheibe Greene

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