TVA top pay denounced as 'ridiculously excessive'

Tom Kilgore, outgoing CEO of the Tennessee Valley Authority, is honored with a resolution during Thursday's board meeting being held in the Northeast Alabama Community College's Lyceum Auditorium in Rainsville, Ala.

Photo by Dan Henry.

The Tennessee Valley Authority boosted compensation for its top officers in fiscal 2012 to a record high despite a federal pay freeze.

Tom Kilgore, TVA’s chief executive who is retiring at the end of the year, was paid more than $4 million in total compensation in the fiscal year that ended Sept. 30. According to financial filings released today, Kilgore’s salary was down slightly from the previous year. But Kilgore’s performance bonuses and deferred retirement benefits boosted his overall compensation in 2012 by nearly 2 percent above the year-ago total.

Other executives who took on new jobs or led the agency make money despite a sales decline got compensation packages with increases of up to 50 percent.

Although the gains were largely in non-cash pension or deferred bonus payments, the overall pay levels were denounced by U.S. Rep. John Duncan, R-Tenn., today as “ridiculously excessive.”

“To give pay raises as high as 50 percent in times of relatively low inflation is just wrong and unfair to the ratepayers,” Duncan said in a statement. “Because East Tennessee is one of the most popular places to live in the entire country, TVA can get outstanding people at its top level without paying these extraordinary salaries.”

Kilgore has headed the nation’s biggest government utility for the past six years and is one of the highest paid federal employees in America.

TVA Chairman Bill Sansom today said that Kilgore’s pay is below that of other CEOs at most other comparable utilities or companies in the region.

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

Sansom said TVA “performed well at a time of slow economic recovery” during 2012.

Compensation rose by double-digit levels for other top executives at TVA.

Kimberly S. Greene, who Kilgore said “knocked it out of the park” with improvements in fossil generation in the past year in her role as chief generation officer, received a 50 percent jump in compensation in 2012 to $3.57 million.

TVA’s chief financial officer, John Thomas, got a 32 percent boost in his compensation package to more than $2.2 million. Thomas helped lead a “diet and exercise” program to trim expenses in the past year when power sales fell more than $800 million short of what was budgeted.

Preston Swafford, head of TVA’s nuclear power program, was paid $2.28 million in compensation in the past year, up 17.1 percent from the previous year. The availability of TVA’s nuclear plants for generation was among the top quartile of all U.S. nuclear plants in 2012, TVA said.

Despite a drop in power sales due to the mild weather and economy, TVA still reported a net income of $60 million for the fiscal year ended Sept. 30.

TVA is a federally owned corporation. The TVA act provides that the utility, although government owned, should compensate its workers at levels competitive with the private sector.

“TVA generally seeks to target total direct compensation for executives at a competitive level with respect to the relevant labor market,” TVA said in its annual report filed today with the U.S. Securities and Exchange Commission.

TVA employs a compensation consultant, Towers Watson, to help compare TVA pay with that of other comparable electric utilities.

Congressman John J. Duncan, Jr. (R-Tenn.) released the following statement Friday in response to reported increases in pay for top executives at TVA:

“I think some of the compensation is ridiculously excessive. To give pay raises as high as 50% in times of relatively low inflation is just wrong and unfair to the rate payers.

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

“This is especially cruel in a time when almost all other federal employees have had their salaries frozen and millions of private sector workers have had their salaries go down.

“Unfortunately, because of the present structure of TVA, the only effective way to stop excessive salaries would be to have the President appoint very fiscally conservative people to the board because the board members are the only ones who could stop giving these inflated salaries.”