published Saturday, November 19th, 2011

TVA boosts year-end bonuses despite federal pay freeze

Photo by Laura McNutt /Chattanooga Times Free Press.
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BY THE NUMBERS


TVA's "Winning Performance" payments:

• $107 million: Total incentive pay to 12,893 TVA employees for fiscal 2011

• $83 million: Total incentive pay to 12,457 TVA employees for fiscal 2010

• $8,300: Average incentive check to be given to each TVA employee next week, up by an average of $1,536 from last year.

• $3.95 million: Total compensation for TVA CEO Tom Kilgore, up by $352,481 from last year.

Source: Tennessee Valley Authority

TVA employees will have extra reason to be thankful next week.

On Wednesday, the eve of Thanksgiving, the federal utility will hand out incentive checks averaging $8,300 to each of its 12,893 full-time workers.

Despite the federal pay freeze, the Tennessee Valley Authority is increasing its year-end incentive pay by nearly 29 percent over a year ago, distributing a record $107 million to reward workers for exceeding goals for the past years.

TVA also raised the compensation for its top executives this year, boosting CEO Tom Kilgore's pay and benefits to nearly $4 million for the fiscal year that ended Sept. 30, nearly 10 times the salary paid to President Barack Obama.

During a board meeting Thursday, TVA directors said there was no increase in the base pay or performance bonuses for Kilgore this year. But Kilgore's contract provided him an extra $352,481 in other pension and incentive pay in 2011 over what he received during the previous year, according to TVA regulatory filings released Friday.

Kilgore and other top TVA executives are among the highest-paid federal employees in America. However, TVA pay consultants estimate Kilgore earns only 37 percent of the industry average for comparable-size electric utilities.

Critics object to raising pay in any form at TVA while most federal workers are under a pay freeze and many Tennesseans are struggling to pay their power bills.

U.S. Rep. John Duncan, R-Tenn., the dean of the Tennessee congressional delegation, has called on TVA to hold the line on pay and benefits until the economy improves and to reduce pay for top executives.

"You don't have to pay multimillion-dollar salaries and benefits to get good, competent workers to live and work in East Tennessee," said Patrick Newton, Duncan's communications manager. "You can rationalize just about anything, but TVA simply doesn't need to pay its executives these kind of salaries."

  • photo
    Tennessee Valley Authority CEO Tom Kilgore talks to members of the Times Free Press editorial board in this file photo.
    Photo by Patrick Smith /Chattanooga Times Free Press.

But a TVA restructuring plan adopted by Congress in 2005 calls for the agency to pay competitive wages to employees, including top executives.

Janet Herrin, the utility's executive vice president of people and performance, said the incentives reflect the fact that TVA as a whole exceeded its targeted goals for fiscal 2011.

In a presentation to the TVA board Thursday, Kilgore gave the utility poor grades for nuclear performance, but the agency met other goals for overall power reliability, cost containment and economic development, Herrin said.

"We are striving to offer competitive pay to attract and retain the best people we can at TVA," she said. "When we go out in the market and look at what comparable utilities of similar size as TVA, they all have a compensation system that is similar with both base pay and pay that is at risk depending upon performance."

Herrin said TVA agreed to participate in the wage freeze ordered by Obama for other federal agencies last year. But she said the incentives are beyond the base pay covered by the freeze.

Some of TVA's top executives, including Group President Kim Greene, Chief Financial Officer John Thomas and Chief Nuclear Officer Preston Swafford, also received bigger paychecks because of promotions or pay raises before the salary freeze became effective in January.

Also exempt from the freeze are the 70 percent of TVA employees represented by labor unions, Herrin said.

Unionized engineers and secretaries got raises of about 2.8 percent on Oct. 1, the start of the 2012 fiscal year. Unionized craft workers are negotiating a possible wage increase for the calendar year of 2012, Herrin said.

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about Dave Flessner...

Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...

about Pam Sohn...

Pam Sohn has been reporting or editing Chattanooga news for 25 years. A Walden’s Ridge native, she began her journalism career with a 10-year stint at the Anniston (Ala.) Star. She came to the Chattanooga Times Free Press in 1999 after working at the Chattanooga Times for 14 years. She has been a city editor, Sunday editor, wire editor, projects team leader and assistant lifestyle editor. As a reporter, she also has covered the police, ...

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Comments do not represent the opinions of the Chattanooga Times Free Press, nor does it review every comment. Profanities, slurs and libelous remarks are prohibited. For more information you can view our Terms & Conditions and/or Ethics policy.
EaTn said...

When you downsize your budget this season due in part to your electric bill, take a moment and remember the folks at TVA are also feeling the pinch.

November 19, 2011 at 6:47 a.m.
McRand said...

Well, they probably had to make a "preemptive strike" against the threat of cost of living increases; inflation. Those that have the power to do for self most often will when it comes to increasing their wealth and therefore rendering as though it is irrelevant to whatever hardships are being experienced by those outside the circle of power. That's what OWS is about. When greed by the lofty and powerful elites reaches a point where the underlings have had enough of being drained by the upper faction of greedy manipulators, revolutions emerge and governments fall. But often the rich and powerful greedy one who orchestrate the oppressive regimes escape to other venues.

November 19, 2011 at 8:34 a.m.
lookoutmtn77 said...

Wow is all I can say about this bonus. The rest of the state is struggling to pay their bills and feed their family. Maybe even try to have a decent Christmas. What a shock our fine government at work giving out millions in extras to alrady overpaid employees. Everyone wonders why no one outside of the TVA bubble respects anything about TVA or their employees. Don't worry TVA keep paying your already overpaid workers even more money, the hard working tax payers will cover for you as usual.

November 19, 2011 at 8:37 a.m.
fairmon said...

It may be time to privatize and get the government out of the picture.

November 19, 2011 at 9:05 a.m.
Carl said...

You might consider that TVA receives no federal funding and operates on the income it generates, like a lot of other businesses. Rather than bash them because of their association with the federal government why not be glad that a business in Tennesse can perform well in these times. This group of wage earners live, work and contribute to the economy of Tennessee. All good things, I'm tired of all the negative reporting it does no good. I noticed Mr. Congressman didn't offer to reduce his ridiculous salary or give up his government health care in these tough times.

November 19, 2011 at 9:32 a.m.
mrredskin said...

Dave and Pam only offer one side of this story, of course.

I don't see a chart that compares Kilgore's or any other of the VP's compensation with respect to other utilities (Duke, Entergy, etc...). Why don't they ever run a story like that? Oh, because it would show how TVA salaries are actually less compared to those in comparable positions.

They also don't want to state that lower-tier employees are paid based on MARKET AVERAGE. These two make it seem like TVA just lines the pockets of every employee that works there.

Nice, Duncan. Reduce pay for thousands of people in your own District. Dolt.

November 19, 2011 at 9:54 a.m.
norsworthy1 said...

Southern Company CEO $10.8 million and Duke CEO $8.8 million and both of those companies have higher rates than TVA.

November 19, 2011 at 10:06 a.m.
lucy_doggie said...

Entergy Corp - big private utility like TVA to the west - CEO makes over $10 million. TVA is the the 5th largest power company in America. Third largest operator of nuclear plants. Controls a 16,000 mile power transmission system that serves 9 million people. Want to pay the people running this company the same as the guy who renews your license down at the county clerk's office or other parts of the "government"? Go ahead, privatize TVA: Your rates will rise closer to the regional and national averages, the compensation of TVA exectives (or the successor private company) would double or triple, and you wouldn't be able to call up your congressman every time you were angry about some power line issue or lake levels or whatever else you didnt like about TVA. What other government agency takes no money from tax payers and is completely self-sufficient? Bet you can't name one. Stop bashing TVA.

November 19, 2011 at 10:20 a.m.
mhbraganza said...

No, No! TVA is a Federal Government Agency and therefore MUST be less competent than private utilities like Duke and Southern Company, no matter what the comparative electricity rates and salaries. "Everyone knows" that government entities are bad and cannot run a business properly. How could "everyone" possibly be wrong?

November 19, 2011 at 11:59 a.m.
nowfedup said...

Three items of concern here, and for that matter with rest of "Public utility". 1. They are monopoly that "present needed rate raised to meet costs", generally got 90% of what they really want from elected. 2. They are set up to assure profits first as must pay off stockholders/investors at competitive rates. Not a lot of "Public" in that one, suspect most "investments" returns are tax free. 3. WHO sets up the "goals" and are they independently verified as real goals or simply "well we gotta get something out there, easy to do" GOALS? For not the WHOLE "Public Utility" programs need real close inspections as to money and funds, etc as reeks of "good ole boys" fun and games. Amazing how "we met goals" but first raise rates to "meet goals", just more of the upper end working together to rip off citizens, a big joke "Public Utility", more like best investment going, tax free and profits assured. That is the real story. Nearly as funny as the loop of "he is paid more at X company" so they get raise, then X company biggy says, "they are getting more then me so I need raise". Yet the more uninformed and ignorant fools howl and bay about "evil unions" while this robbery goes on?

November 19, 2011 at 12:14 p.m.
EaTn said...

nowfedup....at least a comment with some sense. How many of us can call up our electric company and tell them we think that TVA's wage and salary increases are exuberant as reflected in our utility bill and we would like to have another electric supplier? We have two choices..pay the bill or do without electricity.

November 19, 2011 at 12:28 p.m.
tipper said...

I love to see how ridiculous people can be about the little knowledge they have on the utility industry. "Let's privatize!" "We're being ripped off!" You don't know how lucky you people have it in the Tennessee Valley. Do your homework! Check out what privately held, publically traded utilities charge in energy rates. You will see that TVA and its providers are on the lower end of the rate scale to customers. See what utility customers in the Midwest and Northeast pay. The fact that TVA even publishes its salaries and bonuses for you to see is something you'll never find with private utilities. They are not interested in sharing those figures with you and won't if you ask them. And while you are at it, look to see what those companies provide in recreational opportunities and land use. See how many parks they provide. Yeah, let's get Georgia Power or Duke Energy in here right away. They have your financial interests at heart. These days, if it's government it has to be bad, right?

November 19, 2011 at 12:38 p.m.
EaTn said...

tipper....does your comment justify pumping up salaries and passing them onto customers in a tough economy when most folks are already stretched?

November 19, 2011 at 4:09 p.m.
NoMyth said...

Ummm, the article says the CEO gave his own company poor grades for nuclear performance, but the chief nuclear officer received a 5.2% pay increase. How does that make sense? A nice follow-up article might be why the chief nuclear officer did not receive a pay cut. The article also fails to mention any specifics on the goals that were exceeded to warrant the bonuses. That information would be interesting. It also would be interesting if the reporters could do some research to compare the number of employees at other utilities to the amount at TVA...obviously TVA covers a lot of turf, but 12,893 employees seems like a lot, especially since all of the power is distributed through local utilities like EPB.

November 19, 2011 at 6:41 p.m.
Humphrey said...

"What other government agency takes no money from tax payers and is completely self-sufficient? Bet you can't name one. Stop bashing TVA."

US Postal Service

November 19, 2011 at 7:32 p.m.
talkthetalk911 said...

I am a simple minded person which is probably the reason i will never make 4 million dollars a year. I could not tell you if TVA is privateor federal. Maybe i should know. I do think that what some of the posts are saying is...with making 4 million a year is a bonus really necessary? I know that these people more than likely work more than a 40 hour work week and probably have alot to deal with..bare with me while my simple mind does simple math... 4 million a year on an avarage work week..40 hours a week x 52 weeks= 2080 hours...4 million divided by 2080= 1,923 an hour..or $15,384.00 a 8 hour day...once again i know that there could be longer hours put in. o get it. but i think what people see is when one maybe working two r more jobs just to make ends meet and read a story about some one who makes a few million a year and gets bonuses then yes it does look like greed. i dont care what company its with...especially when a wage at that rate in two days exceeds my salerie of a whole year...let the comments begin on how in demand these people are and how simple minded my math is...dont care..not like im making 4 million a year to do it.

November 19, 2011 at 7:55 p.m.
BravesDave said...

More government ... more intrusion into our lives ... tax more, spend more, the ODumbo creed.

November 19, 2011 at 10:02 p.m.
anna said...

Hey Tipper, You are so right, TVA is a blessing to this area, people are so uneducated about TVA.

November 20, 2011 at 12:20 a.m.
gregg965 said...

Yeah I'm getting a bonus, I earned it, and I'm gonna spend it here locally, might even buy me a new boat,

November 20, 2011 at 8:56 a.m.
jesse said...

what does a man do that merits $1,923 an hour?(like if one morn he has a case of hung chow he makes $1,000.00 sittin on the john that day!!)

and the ceo of duke power makes double that?

if i made 4 mil. a year i would have to hire someone to help me spend it!

i can tell you this,if i had his job for 1 month my retirement would be goin a LOT better!!periot!

November 20, 2011 at 9:55 a.m.
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