TVA's Bill JohnsonNASHVILLE - TVA directors today voted to boost the pay of CEO Bill Johnson, already the highest paid federal employee in America, up by $1 million in salary and performance payments.
TVA Chairman Joe Ritch said Bill Johnson, who was paid a total compensation package in fiscal 2013 valued at $5.9 million in cash and retirement benefits, is still underpaid for his performance.
RItch said Johnson, a former Progress Energy CEO recruited to TVA two years ago, was paid in the bottom quartile of top utility CEOs and TVA needs to pay a competitive salary to keep top talent.
The TVA board decided today that Johnson met all of his performance targets in the past year and agreed to boost his salary by 4.7 percent in fiscal 2015 and allow Johnson to make nearly $1 million more in performance incentive payments if he meets all of his goals.
"We could have hired someone for less, but I don't think we'd be getting the results that we are at TVA if we had," Ritch said.
TVA nearly doubled its net income, cut its debt and got its nuclear plants off the regulatory watch list in the past year. Johnson is leading an effort to cut $500 million in annual operating costs at TVA by 2015. The agency recently cut 2,000 jobs to help achieve that target.
"We're not going to apologize for the compensation we give our CEO," Ritch said. following today's board meeting. "This may seem like a large number (paid to Johnson), but in my view he's still underpaid in the results he's delivered for TVA."
TVA is boosting Johnson's base salary from $950,000 to $995,000 a year and is raising far more the amount he can earn in incentive pay.
While TVA's board unanimously approved the pay raise for Johnson today, the record high compensation level at TVA continued to draw criticism from U.S. Rep. John Duncan, R-Knoxville.
"Congressman Duncan has always believed that you don't have to pay these kinds of ridiculous salaries to get good people to live and work in East Tennessee," Duncan's spokesman Patrick Newton said today. "The President of the United States earns $400,000 per year and the Secretary of Energy earns just under $200,000. No one in the federal government should be earning more than the President, but people can rationalize and justify just about anything."