This story was updated Wednesday, April 8, 2020, at 8:11 p.m. with more information.
President Donald Trump wants to cut the pay of TVA's chief executive, who Trump said "is paid a lot of money" to run agency that "when we want them to do something for us they are not there for us."
During a news conference at the White House on Wednesday night, Trump questioned the $8.12 million compensation package give to TVA President Jeff Lyash, a former Ontario Power Co. CEO who was hired to head the nations biggest government utility a year ago.
Trump said he wants to "reduce by a lot" the executive pay for Lyash, who is the the highest paid federal employee in America, as part of an infrastructure package being negotiated to spur the U.S. economy.
"I don't know the gentleman, but he's got a heck of a job," Trump said about Lyash when asked about proposals to require TVA to cut executive pay. "He gets paid a lot of money, which is an amazing thing."
Trump appoints the directors of the board that governs TVA, but the president was critical of the federal utility which last year ignored his appeal to keep running an aging coal plant in Kentucky. Despite appeals by Senate Majority Leader Mitch McConnell of Kentucky and Trump, TVA shut down the last unit at its Paradise coal plant in western Kentucky in February.
Trump is an ardent supporter of what he calls "beautiful coal" and asked TVA to consider keeping the plant open even though TVA estimated it would be cheaper to idle the 57-year-old plant.
"When we want them to do something for us, they are not there for us, and that's not good," Trump said.
Lyash's $920,000 base salary is more than twice the $400,000 salary for the president, and his compensation exceeds all other federal employees. Most of the $8.12 million package paid Lyash during his first nine months is a non-cash $5.97 million cost for the change in pension value for future payout, assuming Lyash stays at TVA for five years
TVA officials insist that the federal corporation is not comparable to other government departments since it doesn't receive any taxpayer funds and is supported entirely by the ratepayers who buy electricity in the Tennessee Valley.
"TVA has not received taxpayer funding in more than 20 years," TVA spokesman Jim Hopson said."We are entirely self-financed by power revenues from our customers. Because of the importance of our mission, we must have a competitive compensation package to attract and retain the highly skilled talent needed to serve those who count on us."
Hopson said Lyash's pay is only about one fourth of that paid to comparable CEOs of similar size investor-owned utilities. TVA is required under the governance reforms adopted by the U.S. Congress in 2004 to pay all of its employees, including its CEO, salaries that are competitive with comparable utilities.
U.S. Rep. Steve Cohen, a Memphis Democrat who frequently differs with President Trump, agreed with the president Wednesday that TVA is overpaying its CEO.
"TVA's salaries are out of line, and this doesn't reflect on Jeff Lyash, who I think is a breath of fresh air at TVA," Cohen said. "TVA compares his salary to that of the major private utilities, but those salaries, as are most of the CEO salaries in this country, are obscene. The disparity between what the CEO makes and what the average worker makes in this country is obscene and no one is worth this kind of money."
Cohen said the multi-million-dollar compensation packages paid to TVA's top executives, combined with the corporate jets and helicopters used to transport TVA's top managers, is a waste of ratepayer money.
Infrastructure spending has been seen as a fourth wave of congressional relief as the nation reels from the COVID-19 global pandemic.
U.S. Sen. Lamar Alexander, R-Tennessee, who supported the current governance for TVA under the 2004 reforms, said including TVA executive compensation limits in a plan to stimulate the economy is misplaced.
"Attacking TVA doesn't do one thing to solve the pandemic and has no place in federal COVID-19 response legislation," Alexander said. "TVA is helping by making $1 billion in credit available to help 154 local electric utilities keep the power on for families who may have trouble paying their electric bills during this crisis. TVA does not receive any federal taxpayer subsidies or federal appropriations. If necessary, we can debate at a more appropriate time the TVA CEO's pay, which is lower than other big utilities, and TVA's rates, which are among the lowest in the country."
Contact Dave Flessner at email@example.com or 423-757-6340.