The Tennessee Valley Authority board, under fire for paying its CEO the richest compensation package of any federal employee in America, will review what it pays TVA President Jeff Lyash and consider possible changes in its executive compensation, TVA's new chairman said Monday.
Memphis attorney John Ryder, who became the interim chairman of the TVA board after President Donald Trump fired both the current and former chairmen at TVA last week, said the board is committed "to doing what is best for the 10 million people in the Tennessee Valley" and will work with the White House to help TVA move forward.
"The issue is not Jeff's performance - everybody agrees he is doing a great job," Ryder said about Lyash. "There is an issue of compensation that the board is going to take a serious look at and how we structure that so that we are in compliance with the TVA act."
Lyash, a former CEO of Ontario Power, joined TVA last year and was paid more than $8.1 million in total compensation during his first six months on the job. Trump's $400,000 annual salary is only a fraction of what Lyash is paid at TVA and the president has called TVA's pay for its CEO "ridiculous." Trump said TVA's top pay should be cut "by a lot" to be more in line with other federal executives.
During a White House briefing last week, Trump called upon the TVA board to replace Lyash and immediately hire a new chief executive officer who "puts the interests of Americans first."
"The new CEO must be paid no more than $500,000 a year," Trump said. "We want the TVA to take action on this immediately."
Trump was especially critical last week of TVA's plans to replace some of its own information technology employees with outside contractors that use some foreign workers employed in the United States with H1-B visas. In response to Trump's criticism, TVA reversed its decision and agreed to keep all of its IT workers.
Ryder and Lyash met Thursday at the White House with Trump's chief of staff, Mark Meadows, and told Trump administration officials of TVA's decision to drop its plans to outsource IT work. Ryder said the meeting was cordial and TVA acknowledged it shouldn't have allowed foreign worker to do the work formerly done by TVA workers, especially during the current pandemic.
Ryder said Trump has the executive authority to remove TVA directors from the board and the federal utility needs to work with the White House and Congress, as appropriate.
Trump does not have the authority to directly fire Lyash, although he has called upon the TVA board to do so.
After Trump fired TVA Chairman Skip Thompson of Decatur, Alabama and Richard Howorth of Oxford, Alabama, the TVA board shrunk to only five members. The board will meet on Aug. 27 to adopt a budget for fiscal 2021 and will also elect a chairman and begin the process of reviewing its CEO compensation, Ryder said.
The TVA act, as amended under the board restructuring Congress adopted in 2004, requires TVA to pay competitive compensation with other electric utilities for all of its workers, including its CEO.
TVA relies upon a Willis Towers Watson Energy Services Executive Compensation Database of 28 investor-owned utilities with revenues of more than $3 billion , plus five major government entities, to help set Lyash's pay. TVA's CEO salary of $920,000 is more than twice the highest federal salary - the $400,000 annual pay for the president - and TVA also has a host of pension and performance bonuses that add millions more to Lyash's pay package.
But TVA said Lyash's compensation ranks in the bottom 25% of major U.S. utilities. Lyash's predecessor, Bill Johnson, was paid $6.9 million in his final year at TVA in 2017. But Johnson was offered an $18.5 million package to run Pacific Gas & Electric in California.
TVA will review its CEO compensation as its prepares to get three new directors.
East Tennessee State University President Brian Noland and former Tennessee Speaker of the House Beth Harwell have been nominated for the TVA board by the president and endorsed by the Senate Committee on Environment and Public Works They are awaiting a final vote of the full U.S. Senate to be confirmed and take their seat on the TVA board.
Last week, a day firing the last remaining Democrat on the TVA board, Trump nominated another Mississippi business leader to succeed the ousted Richard Howorth for the governing board of America's biggest government utility.
Charles W. Cook, Jr., the chairman of Bandwidth Infrastructure Holdings and founder of SummitIG, LLC, who lives in Oxford, Mississippi, was nominated as a TVA director upon the recommendation of Misssippi's U.S. Senators. Cook has served in multiple leadership roles throughout his career with MCI Telecommunications, Metromedia Fiber Networks, and OnFiber Communications, and has constructed and operated the most robust dark fiber network in northern Virginia.
If confirmed by the U.S. Senate, Cook will serve a 5-year term on the 9-member TVA board.
"Bill Cook is a terrific choice for the TVA board and would represent our state well as the only Mississippian on the panel," said U.S. Sen. Roger Wicker, R-Mississippi. "Bill has built a successful career managing complex networks of data and information and advising businesses to help them grow and prosper. I know he will bring the same vision and leadership to this position, which is critical to economic development and reliable energy in our state."
Sen. Hyde-Smith said Cook's experience in serving rural communities will be a valuable asset for TVA.
"I will do everything I can to advocate for his prompt consideration and confirmation," she said.
Trump dismissed Howorth from the TVA board last year after nine years on the board, including a couple of years as its chairman, because Howorth had supported TVA management in trying to outsource information technology jobs and pay Lyash the highest compensation of any federal worker.
Contact Dave Flessner at email@example.com or 423-757-6340.