TVA Reports Performance Compensation Results
December 15, 2006
TVA reported today that performance incentives paid to employees and executive management are significantly lower in 2006 than the previous year because TVA did not meet all of its performance targets.
Winning Performance, the company-wide performance management program, is structured so that a percentage of employee compensation is only paid when corporate performance targets are met or exceeded. Scorecard measures and goals are established at the beginning of the fiscal year with payouts based on actual results.
“Escalating fuel costs, weather and operational issues impacted our ability to meet goals in 2006,” said TVA Human Resources Vice President Phil Reynolds. “TVA did well in several key areas and missed some operational goals by only 1 percent. We knew when we set our targets it would be a challenging year.
“We are proud of TVA’s 2006 accomplishments, most notably a 4.5-percent rate reduction, the lowest nitrogen oxide emissions in the Tennessee Valley since 1995 and the continued reliability of our transmission system,” Reynolds said. “We will continue to set challenging goals in 2007.”
Winning Performance awards in 2006 were approximately 4 percent of payroll for employees and for executive officers, approximately 1 percent of payroll. TVA’s compensation program is market-based, derived from industry best practices and market survey information of utilities similar in size.
TVA’s annual financial statement, Form10-K Annual Report, was filed with the Securities and Exchange Commission today and contains information about the Winning Performance program and executive compensation. In addition, TVA submitted a report to the U.S. Office of Management and Budget on compensation paid to top executives during 2006.
Although TVA is one of the nation’s largest utilities, TVA executives are paid less than industry counterparts because stock options, grants and other financial vehicles are not available at TVA. The pay of the top five executives at TVA is significantly lower than the compensation of the top five executives at other large utilities (PDF, 94 kb). Winning Performance Incentives give TVA executives the opportunity to bring compensation closer to market rates, if performance targets are achieved.
TVA Board members’ salaries are set by Congress, and Board members do not receive incentives or other additional compensation.
TVA receives no tax dollars and is completely self financed. TVA is the nation’s largest public power provider, supplying power to large industries and 158 power distributors that serve approximately 8.7 million consumers in seven southeastern states. TVA also manages the Tennessee River and its tributaries to provide multiple benefits, including flood damage reduction, navigation, water quality and recreation.
Media Contact
John Moulton, (865) 632-8048
TVA News Bureau, Knoxville, (865) 632-6000
