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TVA boosts CEO pay: Johnson, highest-paid federal employee, could earn extra million [Chattanooga Times Free Press, Tenn.]
[November 07, 2014]

TVA boosts CEO pay: Johnson, highest-paid federal employee, could earn extra million [Chattanooga Times Free Press, Tenn.]


(Chattanooga Times Free Press (TN) Via Acquire Media NewsEdge) Nov. 07--NASHVILLE -- TVA President Bill Johnson, already the highest-paid federal employee in America, will be eligible to boost his compensation package by nearly $1 million this year.



TVA directors Thursday unanimously voted to raise Johnson's salary and performance pay after the 60-year-old attorney met all of TVA's targets for 2014.

TVA Chairman Joe Ritch said Johnson, who was paid a total compensation package in fiscal 2013 valued at $5.9 million in cash and retirement benefits, is still underpaid for his performance.


Ritch said Johnson, a former Progress Energy CEO recruited to TVA two years ago, was paid in the bottom quartile of top utility CEOs in the private sector, and TVA needs to pay a competitive salary to keep top talent.

"We could have hired someone for less, but I don't think we'd be getting the results that we are at TVA if we had," Ritch said.

TVA nearly doubled its net income, cut its debt and got its nuclear plants off the regulatory watch list in the past year. Johnson is leading an effort to cut $500 million in annual operating costs at TVA by 2015. The agency recently cut 2,000 jobs to help achieve that target.

"We're not going to apologize for the compensation we give our CEO," Ritch said after Thursday's board meeting. "This may seem like a large number [paid to Johnson], but in my view he's still underpaid in the results he's delivered for TVA." TVA Director Barbara Haskew of Chattanooga, chairwoman of the board's people and performance committee, recommended that Johnson's $950,000 base salary be raised 4.7 percent to $995,000 and that the board boost performance incentives and longevity pay to give Johnson up to $3.3 million more than his base salary. That adds up to more than $1 million extra in cash benefits Johnson could earn in 2015 over this year's pay. TVA also pays for an executive retirement plan for its top leaders.

The pay raise makes Johnson eligible to earn more than eight times as much as President Obama's $400,000 annual salary and nearly 20 times what is paid to the U.S. secretary of Energy.

TVA's board unanimously approved the pay raise for Johnson, although director Marilyn Brown said she wants the board to set "stretch goals" for the CEO next year.

TVA couldn't pay any of its employees a base salary more than what a member of Congress is paid until the TVA act was reformed in 2006. Since then, the CEO's salary has increased five-fold and performance incentives have boosted total compensation paid to TVA executives above any other federal agency.

The TVA act requires the agency to pay competitive salaries. TVA's board hired compensation consultants Towers Watson to help compare its pay with privately owned utilities.

"Unlike investor-owned utilities, we can't offer stock options," Ritch said.

TVA no longer receives any federal taxpayer support. As a federally owned corporation, TVA is supported entirely by those who buy its electricity in its 7-state service territory.

Johnson's pay increase drew immediate criticism Thursday from U.S. Rep. John Duncan, R-Knoxville.

"You don't have to pay these kinds of ridiculous salaries to get good people to live and work in East Tennessee," Duncan's spokesman Patrick Newton said. "No one in the federal government should be earning more than the president, but people can rationalize and justify just about anything." TVA will reveal details of what it paid its top executives in fiscal 2014 when it releases its detailed results for 2014 on Nov. 17.

Contact Dave Flessner at [email protected] or at 757-6340.

___ (c)2014 the Chattanooga Times/Free Press (Chattanooga, Tenn.) Visit the Chattanooga Times/Free Press (Chattanooga, Tenn.) at www.timesfreepress.com Distributed by MCT Information Services

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