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Pepco boss got megawatt pay boost despite problems
Pepco’s chief executive, Joseph Rigby, didn’t get a salary increase last year because of “customer reliability issues,” but he still managed to double his overall compensation, regulatory filings show.
Thanks mostly to an employment deal and supplemental executive retirement plan, Mr. Rigby’s overall compensation rose to nearly $7.2 million last year, according to Securities and Exchange Commission filings.
With hundreds of thousands of Pepco customers in the District of Columbia and Maryland left without electricity for days in sweltering temperatures after a violent storm Friday, Mr. Rigby’s compensation is likely to get a closer look as questions emerge about the company’s performance in restoring power.
Pepco’s proxy statement filed with the SEC this year specifically links the decision by the utility company’s board of directors to freeze Mr. Rigby’s salary in 2011 because of “customer reliability issues.”
While the company’s board of directors kept Mr. Rigby’s salary last year at $880,000, the same salary he received the year before, that tells only a part of the story of the top executive’s compensation. Overall, SEC filings put Mr. Rigby’s 2011 compensation at $7.16 million, compared with $3.55 million in 2010 and $3.11 million in 2009.
Explaining the decision to raise Mr. Rigby’s salary by 11.9 percent next year to $985,000, the company disclosed in SEC forms that Pepco’s compensation committee “recognized Mr. Rigby’s strong leadership evidenced by his oversight of the company through reliability, customer service and reputational issues.”
In addition, the company said that Mr. Rigby’s salary had been below the median salary for his position and that none of its top executive earnings received “above-market earnings” through any of Pepco’s deferred compensation plans.
In determining compensation, Pepco officials also said in the regulatory filings that they reviewed a host of factors, including experience and pay levels in the marketplace for similar positions.
Still, asked what effect freezing Mr. Rigby’s pay would have on customer reliability, given that his overall compensation increased so sharply anyway last year, a Pepco spokeswoman said Mr. Rigby had been eligible for additional money but did not receive it.
Spokeswoman Courtney Nogas wrote in an email that the board committee overseeing compensation elected not to make awards for about $1.3 million in incentive pay for which Mr. Rigby had been eligible in 2011 “in view of the company’s ongoing customer reliability issues.”
She also noted, however, that Mr. Rigby “outlined his reliability and customer service improvement plan for the board at the beginning of 2010 and has since been successfully implementing that plan.”
Pepco’s outside board members, who approved Mr. Rigby’s new employment deal, all received more than $100,000 in compensation in 2011. They also received corporate perks such as free downtown parking and tickets to sporting events, according to SEC forms.
A supplemental executive retirement plan approved by the company last July, described as the “SERP” in regulatory filings, helped boost Mr. Rigby’s overall compensation.
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