TVA boosts pay for top bosses to record level

Utility boosts income, executive pay in fiscal 2016

TVA president and CEO Bill Johnson speaks to reporters after a news conference at the Watts Bar Nuclear Plant on Thursday, Oct. 22, 2015, near Spring City, Tenn., as Unit 2 begins producing electricity for the first time, 43 years after construction began at the site.

TVA executives who helped lead the utility to record earnings in the past year shared in record high performance bonuses, according to financial filings today with the U.S. Securities and Exchange Commission.

TVA President Bill Johnson was paid a record $4.9 million in salary and performance bonuses in in the fiscal year ended Sept. 30, up 7.4 percent from what he was paid in salary and bonuses the previous year. Including the value of his pension and other payments, Johnson's total compensation in fiscal 2016 totaled $6.45 million, making him again this year the highest paid federal employee in America.

Johnson, a former Progress Energy CEO recruited to TVA four years ago, was still paid in the bottom quartile of top utility CEOs in the private sector, according to pay consultants who study executive compensation. The $4.9 million paid to the TVA CEO in the past year was 40 percent below the median pay for comparable CEOs in the utility industry, according to a study by the Towers Watson consulting group.

Johnson's $950,000-a-year salary, before any performance pay, did not change in the past year even though TVA continued to perform better on most of its metrics in the past year, including earning a record $1.2 billion with lower average electric rates for customers.

TVA Chairman Joe Ritch said TVA must remain competitive in its compensation with other utilities and should reward managers and employees when they meet performance standards.

"We've seen enormous progress and we recognize that when you have a highly talented person or group of persons in management like we have at TVA we need to be somewhat competitive in our compensation," Ritch said. "We are still below the average pay for many of these positions, but we still want our leadership to know that we are supporting them. While compensation is not the only thing you get by working at TVA, it is a very important reflection of our belief that they should be here and stay here at least for a reasonable period of time."

Other top TVA executives also enjoyed bigger boosts in total compensation last year due to TVA's improved performance. TVA Chief Operating Officer Charles "Chip" Pardee, who is retiring from TVA next month, was paid a compensation package worth more than $3.3 million, up 12 percent from the $2.98 million in total compensation Pardee received a year ago.

TVA Chief Financial Officer John Thomas, who was paid $2.61 million in total compensation in fiscal 2015, earned early $2.9 million in total salary, bonuses and pension value in fiscal 2016.

TVA Chief Nuclear Officer Joe Grimes, who was recently promoted to senior vice president over all TVA power operations, was paid nearly $2.2 million in fiscal 2016, up from $2.09 million in compensation the previous year.

Mike Skaggs, who led the startup of Watts Bar Unit 2 in the past year, was paid more than $2.3 million, up from $2.05 million in the previous year. Skaggs was recently promoted to executive vice president of operations at TVA.