TVA distributes $12.9 million in bonuses to 146 executives
“During the 2005 fiscal year, TVA’s integrated power system recorded its most successful year on record, and TVA employees met their performance targets and earned incentive pay. We put the incentive pay at risk each year, and we keep raising the bar on performance because it is a proven method of getting results,” TVA chairman Bill Baxter said.
TVA supplies electricity to some 8.5 million people in most of Tennessee and parts of Kentucky, Alabama, Mississippi, Georgia, North Carolina and Virginia. Revenues rose to $7.8 billion in 2005 but net income dropped to $85 million mainly due to increasing fuel costs, the self-financing agency reported last month.
Last year, TVA gave 138 executive bonuses totaling $11.5 million.
TVA reported in November it awarded $50 million in bonuses to its rank-and-file employees, averaging $3,895 per worker, a 10 percent increase over last year.
The report TVA disclosed to the U.S. Office of Management and Budget said 50 executives earned more than $25,000 in bonuses, based on reaching certain agency or departmental goals.
The highest paid executive was Ike Zeringue, who retired this month as the president and chief operating officer. His salary of $130,000 was increased by a $840,000 bonus and $570,000 in deferred compensation for a total of $1.54 million.
TVA officials pointed out that the highest-level executives at comparable investor-owned utilities were paid an average $4.9 million in 2005, according to a survey by the Towers Perrin consulting agency.
Zeringue’s replacement, Tom Kilgore, received a total of $1.04 million, including a bonus of $672,665. He joined TVA in March.
TVA’s second-highest paid executive is Karl Singer, the chief nuclear officer. He was paid $1.13 million, including a bonus of $653,347.
“As one of the largest producers of electric power in the United States with almost $7.8 billion in revenue, TVA has the same executive-management requirements as private, investor-owned utilities and must be able to offer competitive compensation,” TVA director Skila Harris said.
Baxter and Harris receive only salaries and no bonuses as members of the TVA board of directors. The board is being expanded to nine part-time members from three full-time members. It will be composed of Baxter, Harris and six people nominated by President Bush so far who still have to be confirmed by the U.S. Senate.
Currently, the chairman’s salary is $149,200, and a director gets $140,300. The part-timers on the new board will drop to $50,000 for the chairman and $45,000 for the directors.
“The new board will have a variety of business backgrounds, so I am sure they will be very active in reviewing TVA’s compensation practices. I believe it is in TVA’s best interest to offer competitive, performance-based compensation to its employees,” Baxter said.
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