TVA’s top executive gets 10 times Obama’s pay

Federal cap can’t be used

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The Tennessee Valley Authority is owned by the federal government and provides electricity to millions of customers in seven states, including Virginia, but the salaries it pays its executives aren’t anything like what most federal workers can imagine.

Last year, the TVA paid more than $4 million just to its top executive, about 10 times what President Obama makes, while another executive’s personal fortunes rose by more than 50 percent to well over $3 million.

The utility detailed the generous executive compensation in a recent filing with the Securities and Exchange Commission, prompting quick criticism from one Republican member of Congress from Tennessee who called the pay excessive.

But the payouts, including salary, retirement and bonus compensation, are perfectly legal because the self-financed TVA, for the most part, is unrestrained by compensation caps imposed across the rest of the federal government.

In its SEC filing, the utility also noted that under its policies, compensation should be based on an annual survey of prevailing compensation for similar positions in private industry. By that measure, utility officials say, TVA executives are underpaid compared with private-sector counterparts.

Indeed, the top executive for Pepco Holdings Inc., the utility that supplies electricity for much of the Washington region, received nearly $7.2 million in salary and other compensation last year, according to SEC filings. Still, Pepco doesn’t have the close relationship between the federal government and TVA, whose directors are presidentially appointed.

Rep. John J. Duncan Jr., Tennessee Republican, called the TVA compensation “ridiculously excessive” in a statement his office issued after the SEC filing.

“To give pay raises as high as 50 percent in times of relatively low inflation is just wrong and unfair to rate payers,” he said.

Calling on Mr. Obama to appoint “very fiscally conservative people” to the TVA’s board of directors, the lawmaker also noted that almost all federal employees have had their salaries frozen as many in the private sector are facing salary cuts.

TVA officials issued a statement defending the pay package for the retiring chief executive, Tom Kilgore.

TVA Chairman William B. Sansom said Mr. Kilgore’s compensation remains “near the bottom in total compensation among all utilities,” based on a review of market data.

“As a board, we know TVA must hire and retain people with experience to operate and maintain a complex power system,” Mr. Sansom said in a statement. “TVA operates one of the nation’s largest public utility systems and competes with other investor owned utilities to sustain operational excellence.”

But Mr. Duncan said TVA ought to be able to attract executives without paying such high compensation.

“Because East Tennessee is one of the popular places to live in the entire country, TVA can get outstanding people at its top level without paying these extraordinary salaries,” he said.

According to SEC filings, Mr. Kilgore’s total compensation for fiscal 2012 came to $4,029,562, up from the $3,950,560 he made in 2011.

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