CORRECTION: This story was updated on Monday, Nov. 15, 2021, at 11:13 a.m. to correct the attribution and titles for quotes from Kenny Allen and Sue Collins.
Many employees of the Tennessee Valley Authority will get the biggest paychecks of their TVA career next week when the federal utility awards a record-high $180 million of performance pay to its nearly 10,000 workers.
Just ahead of the Thanksgiving holiday and next week's Black Friday sales, TVA will distribute Winning Performance payments for fiscal 2021 that will provide the typical worker an extra $7,492 in recognition of TVA meeting or exceeding all of its major corporate goals.
The annual performance payments, which are up $17 million over what was paid to workers in incentive pay a year ago, are in addition to the individual merit pay and negotiated wage adjustments each year that average about 3.1% across the TVA organization.
Last week, TVA directors approved paying the full amount of Winning Performance pay after calculating that TVA had achieved 142% of the target levels to yield the biggest such incentive pay per employee ever.
"A portion of every TVA employees' pay is at risk, and that at-risk pay is only earned when the performance meets the goals that are established at the beginning of the year," said Kenny Allen, a TVA director and chair of the board's People and Performance Committee. "TVA's performance this year was one of the best we have ever seen."
TVA President Jeff Lyash said the TVA board sets meaningful metrics each year to judge TVA's performance and the incentive payment program encourages all TVA employees to help achieve or exceed such goals, which include a variety of financial, reliability, safety and economic growth targets.
Lyash said TVA maintained historically high reliability of service throughout 2021 even while other parts of the U.S. such as Texas and California sometimes struggled to keep the lights on after winter storms and wildfires shut down some power plants and transmission lines.
Despite higher fuel expenses, TVA kept its delivered price of power, on average, 1.5% lower than the previous year and still below the levels of five years earlier. TVA's economic development team also worked to help recruit a record number of job additions from 270 new and expanding businesses that collectively plan to add nearly 81,000 more jobs in the Tennessee Valley.
With its debt at a 30-year low and below what was recommended by the Government Accounting Office, TVA Chief Financial Officer John Thomas said TVA's financial standing is as sound as it has been in decades and TVA is well-positioned to hold rates constant over the next decade.
TVA achieved such results while also reducing carbon and other pollution from TVA's power plants and working to help diversify TVA's workforce to better reflect the region it serves.
"What we are rewarding our employees with is a small fraction of what we are rewarding our customers with," said Lyash, whose own compensation also was boosted by nearly $2.6 million last year. "The strength of TVA truly is its people — the experienced, talented workforce that is committed each and every day to improving the quality of life of the customers and communities that we're privileged to serve."
The median payment being paid under the Winning Performance program this year is up from the median of $7,204 of incentive bonuses paid a year ago and the median $6,840 of Winning Performance pay provided to the typical TVA employee in 2019.
Total winning performance payments
TVA’s incentive payments for at-risk pay to its nearly 10,000 employees will be the highest ever since the current measurement system was adopted. Workers will receive the annual Winning Performance payments next week for fiscal 2021 results.
2021: $180 million
2020: $163 million
2019: $133 million
2018: $144.5 million
2017: $112.5 million
2016: $102 million
2015: $113 million
2014: $131 million
Source: Tennessee Valley Authority. Total Winning Performance payments are distributed among all full-time employees who were on the job in the past year based upon their pay levels and their work responsibilities. The totals include executive bonuses paid to TVA’s top managers.
The amount of the Winning Performance pay ranges from 5% of a worker's annual compensation for employees with collective bargaining agreements up to 150% of at-risk pay for TVA's CEO. About 60% of TVA's staff is represented by unions and will get incentive payments equal to 5% of their annual base pay.
Under the TVA Act, the federal utility is directed to pay its workers comparably with similar electric utilities and government agencies.
In fiscal 2021, the median annual compensation for TVA employees, including wages, incentive pay and overtime, was $139,953. That is almost four times the median pay for all Tennessee workers last year, which averaged $37,442, according to the Tennessee Department of Labor and Workforce Development.
Although TVA benchmarks its pay with utilities across the country, the cost of living in Tennessee averages 11.3% less than the U.S. average and Tennessee ranks as the 6th least expensive state in the country to live.
Most of TVA's jobs involve specialized work, including nuclear operators, electricians, linemen and engineers. TVA is America's biggest government-owned utility with revenues last year of $10.5 billion, and TVA manages the nation's fifth-biggest river to provide flood control, river navigation, recreation and economic development in its seven-state region.
Over the past decade, even as TVA has raised employee pay, the federal utility has cut more than $800 million of annual operating expenses and trimmed its staff size to less than a third of the peak reached in the 1980s.
"We've been re-imagining how we do work and taking those lessons from what we have learned to achieve even better results," said Sue Collins, executive vice president and chief people and communications officer at TVA. "Over the past couple of years, we've had record-breaking results and the Winning Performance payments help our staff stay focused on our objectives and be rewarded for their successes. Putting pay at risk incentivizes employees to perform at high levels because then they share in that performance in a way that directly impacts the dollars they receive."
The Winning Performance payments for fiscal 2021 will be paid next week to 9,922 TVA employees. With nearly a third of all TVA workers employed in the Chattanooga region at the TVA power headquarters in downtown Chattanooga, the Sequoyah Nuclear Plant near Soddy Daisy, the Raccoon Mountain Pumped Storage facility and other near TVA facilities, TVA will pay out more than $50 million next week into the Chattanooga area economy.
Contact Dave Flessner at firstname.lastname@example.org or at 423-757-6340.