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Tenn. congressmen criticize pay raise for TVA executive

Tenn. congressmen criticize pay raise for TVA executive

Posted: Monday, November 3, 2008 7:37 pm

By DUNCAN MANSFIELD Associated Press Writer KNOXVILLE (AP) — Two Tennessee congressman say a half-million-dollar pay raise for the top executive at the Tennessee Valley Authority is excessive. The TVA board on Thursday agreed to increase president and CEO Tom Kilgore’s bonus-driven compensation package next year from a potential $2.7 million to $3.27 million. The decision comes just weeks after TVA put into effect its largest electric rate hike in three decades. Knoxville-based TVA is the nation’s largest public utility, providing electricity to 8.8 million consumers in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia. U.S. Rep. Zach Wamp of Chattanooga said Friday that for TVA’s big pay boost to so closely follow a 20 percent rate hike effective Oct 1 “defies common sense.” U.S. Rep. John Duncan of Knoxville called it “excessive” and urged the TVA board to consider delaying it. TVA Chairman Bill Sansom, however, said the enhanced pay package is needed to keep the federal utility competitive with the private sector for executive talent and that TVA’s pay is still far less than many investor-owned utilities. TVA appreciates times are tough for many, he said, but the TVA board has a responsibility to make sure the $12 billion agency is “run right” and “we have got to have the talent these people have.” Kilgore will get his first increase in base salary — a $200,000 hike to $850,000 — since he arrived at TVA in 2005 under the plan approved Thursday for next year. The rest of his pay package is based on performance. The agency has yet to say how their executives fared in the fiscal year ending Sept. 30, but Sansom said Kilgore will probably earn about $2.2 million of his current $2.7 million potential. A consultant study found TVA’s top executive pay to be about middle range, with power companies such as Southern Co., Florida Power & Light and Duke paying their chief executives as much as $9 million to $11 million, Sansom said. Most of TVA’s salaried executives will get pay raises of around 3.7 percent next year, Sansom added. Duncan said he has heard this argument before. “Just because someone else is making a ridiculous or unjustified salary does not mean that a public service agency like TVA should follow suit,” the congressman wrote in a letter to Sansom. Eastern Tennessee is “one of the most popular places to live in this entire country,” Duncan continued. “TVA does not need to pay excessive salaries or bonuses to attract well-qualified people to fill its top-level positions.” Wamp said the pay raise coming on the heels of a rate increase “isn’t fair to the many hard working TVA customers who will have to tighten their belts even further to pay ever-higher electric bills.” Sansom said the timing was coincidental and one didn’t have anything to do with the other. The agency ordinarily sets executive compensation at this time of year, while the rate hike was attributed to rising fuel costs. ——— TVA: http://tva.gov Published in The Messenger 11.03.08

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