By The Associated Press
CHATTANOOGA, Tenn. — The Tennessee Valley Authority more than tripled the pay of its chief executive and will give employees bonuses averaging more than $6,900.
An annual report released Friday by the utility showed President Tom Kilgore was paid a record high $3.6 million in the fiscal year that ended in September, the Chattanooga Times Free Press reported.
Overall, TVA employees got more than $94 million in bonuses after meeting most of its annual performance standards in fiscal 2010.
The utility’s 90 top executives will average more than $120,000 each and nonexecutive employees will get checks averaging $6,917 each. Salaried employees are also getting an average raise this fall of 2.9 percent.
TVA officials defended the bonuses and pay hike by pointing out that the utility surveys comparable businesses to set compensation levels.
“While our compensation plan is designed to pay market rates, we tend to be conservative and pay below the market,” TVA Chief Financial Officer John Thomas told reporters during a briefing Friday. “We had a good year and all of our executive pay is based upon performance. We believe these compensation programs do matter in driving performance and in TVA’s ability to attract and retain talent.”
According to a salary study, the typical major utility CEO was paid more than $6 million last year. Kilgore, 62, gave up pay raises and bonuses a year ago after a massive coal ash spill in Kingston in 2008.
But this fiscal year, he was the highest-paid federal employee in America. Next year he’ll be eligible for an additional $200,000 if he again meets all of his performance standards.
Justin Owen, president of the taxpayer advocacy group Tennessee Center for Policy Research, called the pay hike for Kilgore “offensive” when taxpayers and ratepayers are struggling with unemployment. “This represents government largesse more than reasonable compensation,” he said.
U.S. Rep. John Duncan, R-Tenn., objected to the million-dollar salaries for TVA executives.
“You don’t have to pay people ridiculous salaries to get them to come to East Tennessee and work,” said Patrick Newton, a spokesman for Duncan.
Kilgore rated the utility with a “B-plus” for the fiscal year in a year when revenues were down because of lower fuel costs.
“But TVA did have a good year when we produced more electricity than the year before with lower revenues,” he said. “Because TVA doesn’t make a profit, one way we measure success is keeping prices low for our customers.”
The average monthly wholesale rate for TVA electricity was down 9.3 percent from 2009. Net earnings rose 33.9 percent to a record high $979 million and power sales rose 6 percent.