By Duncan Mansfield, Associated Press
Knoxville, TN – In a year that saw two electric rate increases, the Tennessee Valley Authority gave its top executive a more than $200,000 pay raise to lift his compensation package above $2 million.
President and Chief Executive Officer Tom Kilgore is one of three executives at the country's largest public utility earning more than seven figures in fiscal 2008, which ended Sept. 30.
The others are Chief Operating Officer Bill McCollum at $1.7 million and Chief Nuclear Officer Bill Campbell at $1.1 million.
In an annual report to the White House's Office of Management and Budget, TVA listed 54 executives earning performance bonuses of at least $25,000 last year. TVA's other top executives are Chief Financial Officer Kim Greene at $997,685 and Nuclear Senior Vice President Ashok Bhatnagar at $991,524.
Still, executive pay consultants say TVA is paying on par or less than other utilities.
Knoxville-based TVA, which supplies electricity to about 8.8 million consumers in Tennessee, Kentucky, Alabama, Mississippi, Georgia, North Carolina and Virginia, twice raised rates last year by a combined 12 percent. The increases were needed to offset rising fuel costs and a drought that limited hydroelectric generation, the agency said.
TVA noted the results in its annual report to the Securities and Exchange Commission on Tuesday revenues rose to a record $10.4 billion even though power sales grew by less than 1 percent.
When TVA's board decided in October to hike Kilgore's bonus-driven compensation package even more from a potential $2.7 million last year to $3.27 million next year U.S. Rep. Zach Wamp of Chattanooga said it "defies common sense." U.S. Rep. John Duncan Jr. of Knoxville called it "excessive" in the current economy.
But TVA officials said the pay raises for Kilgore and his executive subordinates were justified, pointing to a TVA-commissioned compensation study by Towers Perrin Energy Services that compared pay packages for top executives at 40 utilities or energy companies having at least $3 billion in revenue.
Kilgore's $2 million package was dwarfed by the $5.9 million average for CEOs, the consultants said. McCollum's $1.7 million compares with an industry average of $2.5 million for COOs, and Campbell's $1.1 million compares with $1.7 million for chief nuclear officers.
"We have to compete in the same market as other utilities," TVA spokesman John Moulton said Wednesday. "Our pay is market-based and performance-driven, and it is still very conservative when compared with comparable positions at other utilities."
Kilgore received $655,000 in salary; $1.1 million in incentive awards, and $300,000 in annual deferred compensation for a total of just over $2 million, the OMB report said. Based on salary and incentives alone, that's $209,000 more than the year before.
However, the agency's 350-page annual report suggests Kilgore received a total compensation of nearly $2.5 million last year, including pension benefits. That is $482,036 more than fiscal 2007. All top five officers earned more than $1 million last year under this measure.
The annual report also shows TVA paid its nine part-time directors nearly $350,000 last year, with a high of $53,854 to Chairman Bill Sansom. That's about the same amount paid to TVA's three full-time directors before the agency's management was restructured by Congress a few years ago.