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    • TVA CEO Jeff Lyash’s salary remains at .5 million, highest among federal employees
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    TVA CEO Jeff Lyash’s salary remains at $10.5 million, highest among federal employees

    Umito Posted on

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    Tennessee Valley Authority CEO Jeff Lyash will retain his $10.5 million compensation and status as the highest-paid federal employee, while other top utility executives got big raises thanks to performance-based rewards after a record year.

    TVA, the nation’s largest state-owned electricity provider, sets executive pay at lower levels than its peers. It does not receive taxpayers’ money and its directors are paid through electricity sales.

    Lyash’s salary is 18% lower than the median CEO salary of his peers, but his electricity prices are also lower than most of his peers.

    “Public scrutiny is never entirely fair, but it is also necessary and welcome,” Lyash told Knox News in an interview. “CEO compensation has always been and continues to be in the fourth quartile. So producing top quartile results with bottom quartile compensation, I think, is a very good deal for our clients.”

    Only 14% of Lyash’s compensation and 25% of other senior executives’ compensation constitutes base salary. The rest is a complex mix of performance rewards, retention incentives and deferred revenue, much of which is based on goals set by the TVA board and Lyash.

    The board refused to give Lyash a raise for the second year in a row After reduce its maximum incentive payments in May and ensuring that he does not make decisions that impact his own salary. About $8.1 million of Lyash’s total compensation is direct salary, with the remainder made up of pensions and deferred income.

    TVA included the total compensation of its five highest-paid executives in its annual filing with the Securities and Exchange Commission on November 14.

    What TVA’s top five executives achieved this year

    Several TVA executives are among the highest paid federal employees, highlighting TVA’s unique position as a federal agency that operates much like a private business:

    • Jeff Lyash, CEO: $10.5 million, a 0% increase. Includes: $5.3 million performance-based payment
    • John Thomas, CFO: $6.3 million, an increase of 38%. Includes: $3.3 million performance-based payment
    • Don Moul, director of operations: $5 million, an increase of 38%. Includes: $2.9 million performance-based payment
    • David Fountain, general counsel: $3.3 million, a 33% increase. Includes: $1.9 million performance-based payment
    • Tim Rausch, nuclear director: $3.3 million, an increase of 19%. Includes: $1.6 million performance-based payment

    VAT revenues on the rise after the price increase

    TVA, which sells electricity to 10 million customers in seven states, reported total operating revenues of $12.3 billion from electricity sales for the fiscal year ended Sept. 30. Revenue increased 2% from last year, driven by pricing increases and higher sales volume.

    The TVA board of directors approved a Rate increase of 4.5% in 2023 and a Rate increase of 5.25% Earlier this year, increases that local power companies like the Knoxville Utilities Board transmit directly to electricity customers.

    Despite these increases, which will generate nearly a billion dollars by 2025 to finance new gas plants and updates of nuclear and hydroelectric plants, TVA’s overall customer rate was 2% lower this year due to lower natural gas prices.

    Executive compensation and revenues aren’t the only numbers that increased this year: Median annual compensation for all TVA employees rose to $163,799 from $146,466 last year. In total, TVA paid $276 million in performance bonuses.

    “The incentives we paid to all employees were a little bit higher,” Morgan Hopkins, TVA’s director of compensation and benefits, told Knox News. “Overtime is also included in this number, so where demand is higher or we are working on more projects requiring more hours, you can see that.”

    TVA’s workforce increased to 11,267 employees compared to 10,795 last year. The ratio of CEO pay to median employee pay is 64-to-1, up from 72-to-1 last year. Besides a “year of exceptional performance,” the wage increase is partly due to broader trends, Lyash said during a conference call with Finance.

    “Across the board, businesses have experienced some wage inflation, and so we’ve seen that in our wage rates for our union members, as well as our non-union workforce,” Lyash said. “There is some slight upward pressure on hourly wages due to the macroeconomic trends we have seen.”

    TVA endured its highest peak power demand ever recorded during a winter storm in January, and its dam system held back more than 400 billion gallons of flood water during Hurricane Helene, two achievements celebrated by the board of directors and management.

    The eight part-time TVA board members earn between $61,100 and $68,100, after slight increases this year, consistent with other U.S. government employees.

    Trump soured on TVA executive compensation

    The remuneration of TVA executives has been the subject of particular attention for years from elected officials and customers. The public service sets salaries at competitive rates since its constitutive document, the VAT Lawrequires that wages be determined relative to private companies.

    President-elect Donald Trump notably called Lyash’s salary “ridiculous” during his first term in 2020, addition: “I don’t know this gentleman, but he has a hell of a job. He gets paid a lot of money.”

    The presidential salary of $400,000 is more than 25 times lower than Lyash’s.

    Later that year, Trump dismissed two members of the TVA board of directorsincluding board chairman James “Skip” Thompson, and called for Lyash’s dismissal due to the utility’s outsourcing of IT tasks. Although the president can remove TVA board members, he does not have the power to remove the CEO.

    Trump could have the chance to appoint an entirely new slate of TVA board members during his second term, although nominees often face delays in their Senate confirmation. President Joe Biden last year nominated former Memphis City Councilwoman Patrice Robinson to fill an empty seat on the nine-member board, although she was not confirmed.

    TVA executives haven’t spoken with Trump since he won the presidential election, but the utility would “adapt our plan to reflect the administration’s policies, as we always do,” Lyash said.

    TVA and its local power companies received massive federal subsidies for clean energy and transportation improvements funded by Biden’s climate spending bills.

    Daniel Dassow is a growth and development journalist specializing in technology and energy. Phone 423-637-0878. E-mail [email protected].

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