Joe Smyth Investor-owned electric and gas utilities paid their CEOs $3.2 billion between 2017 and 2022, according to corporate data reviewed by the Energy and Policy Institute.
CEOs for the 57 companies reviewed for this analysis received more than $578 million in 2022. Total utility CEO compensation declined from last year, as it did for most other major US companies. Large portions of CEO compensation depend on company stock prices, which fell in 2022 for most companies. “The decline marks the first time in a decade that compensation for top executives at the biggest U.S. companies didn’t reach new highs,” the Wall Street Journal reported.
Top paid CEOs led utilities implicated in scandals
The highest paid utility CEO in 2022 was NextEra Energy’s James Robo, whose compensation totaled $40.4 million after retiring in July 2022. The company also paid incoming CEO John Ketchum $17.4 million in 2022, for a total of $57.8 million to both CEOs during the year.
Exelon CEO Christopher Crane received the second highest compensation at $30 million, while Southern Company CEO Tom Fanning received $24 million.
All three of those top paid utility CEOs retired during the last year, and all three oversaw utilities whose subsidiaries have recently been implicated in high-profile scandals. NextEra subsidiary Florida Power & Light paid millions of dollars to consultants who helped to run spoiler candidates in Florida State Senate elections. Exelon subsidiary ComEd agreed to pay $200 million three years ago to resolve a federal criminal investigation into a years-long bribery scheme as part of a deferred prosecution agreement. A federal jury recently found four former ComEd executives and associates guilty for bribery, record falsification, and conspiring to influence and reward the former Speaker of the Illinois House to assist with favorable utility legislation. A long-time consultant for Alabama Power, a Southern Company subsidiary, conducted surveillance of Tom Fanning “to influence corporate decision making and succession planning for his own benefit and at the direction of executives of Alabama Power Company,” according to a court filing by a former employee of the consultancy.
Exelon CEO Chris Crane’s $30 million compensation reflects a $4.2 million deduction to account for its subsidiary’s $200 million fine in the corruption case. Exelon’s proxy statement notes: “The independent directors believe this adjustment is appropriate because Mr. Crane was serving as CEO of Exelon, Commonwealth Edison’s parent, at the time the conduct described in Commonwealth Edison’s deferred prosecution agreement occurred. More generally, the independent directors believe this adjustment is consistent with Exelon’s commitment to CEO accountability for all aspects of the Company’s performance and is supportive of its strong culture of ethics and compliance.” Despite the deduction, Crane’s compensation in 2022 was about twice the $15 million he received in previous years.
Florida Power & Light CEO Eric Silagy, who retired in January 2023, “signed an exit agreement that includes a multi-year “claw back on compensation” if there is a finding of “any legal wrongdoing,” the Florida Times-Union reported.
Some regulators and policymakers seek to limit how much ratepayers are charged for utility CEO compensation
Last month, Minnesota Public Utility Commission Chair Katie Sieben reduced how much Minnesota ratepayers will be charged to pay for the compensation of Xcel Energy’s top executives. During a June 1 hearing in the utility’s rate case, Chair Sieben explained the motion:
“In the highest cases, ratepayers pay in excess of $1 million dollars a year for Xcel’s two highest paid executives. So my new language limits the amount of money recoverable from ratepayers of the top 10 highest paid executives to $150,000/year. Which, as people know from last week, is now pretty close to what the Governor of Minnesota makes. Shareholders can still decide to compensate Xcel’s executives above the $150,000/year cap, but ratepayers and their bills should not.”
Chair Sieben explained that the move “Draws support from extensive public comment in the record about excessive compensation for top executives,” and also said “I think there needs to be further work done here in the future.”
The five Minnesota PUC Commissioners unanimously agreed to Chair Sieben’s motion.
In March, Michigan Capitol Confidential reported: “Michigan lawmakers criticized profits and executive compensation at DTE Energy for a second straight week Thursday, demanding to know why the utility struggles with reliability while charging high rates to customers.”
During a March 23 hearing of the Michigan Senate Energy and Environment Committee, State Senator Sue Shink questioned DTE Electric President Trevor Lauer about the company’s profits and CEO compensation as ratepayers dealt with extended outages.
“We’ve talked about the profits, about $1 billion of profits were posted during the ice storm outage. Your CEO makes over $10 million a year. You recently put in a request to the MPSC for the largest rate increase in state history, about $622 million. DTE Energy has increased rates four times in the last five years, totalling over $800 million in increases, and we’re still having regular outages.”
Michigan legislators again questioned the $10 million compensation DTE Energy paid to CEO Gerardo Norcia in 2022 during a June 28 hearing held by the House Energy, Communications, and Technology Committee. One member contrasted Norcia’s pay with the experience of his constituents, who are DTE customers. Bridge Michigan reported:
During the committee meeting, Rep. Mike McFall, D-Hazel Park, pointed out that Norcia made $10 million last year.
“I have people that can barely pay their bills, and you’re asking for such a large rate increase,” McFall said. “How do I explain to residents in my district, who can barely pay their bills now and can’t always count on their service, that type of rate increase?”
In April, the Ohio Consumers Counsel urged the Public Utilities Commission of Ohio to expand its investigations into FirstEnergy’s multi-million dollar bribery schemes to include payments to FirstEnergy executives implicated in the bribery scandal. The Ohio Consumers Counsel, a state agency that represents Ohio ratepayers, explained:
New information has revealed that, while the bribery scheme was in progress, FirstEnergy paid over $100 million to the executives who were fired or “separated” for their roles in the bribery scheme. This issue alone begs the question of how much of this executive compensation did Ohio consumers pay in the rates FirstEnergy was charging?
The Public Utilities Commission has not yet ruled on the request, because the PUCO stayed its investigations into FirstEnergy at the request of the U.S. Department of Justice.
Last year, an audit by the Pennsylvania Public Utilities Commission highlighted that FirstEnergy failed to claw back the compensation paid to CEO Charles Jones, after he was implicated in the utility’s bribery scandal. FirstEnergy later announced that it was trying to claw back $56 million in compensation from Jones, but to date those efforts have not succeeded.
CEO compensation for 57 investor-owned electric and gas utility companies
The Details tab shows compensation for each CEO in each of the six years, sorted by 2022 compensation; the Totals tab is sorted by total CEO compensation during the six year period. Both tabs list the parent company, and show utility subsidiaries in parentheses.
Notes on the data
This analysis is focused on the compensation paid to the CEOs of 57 investor-owned electric and gas utility companies, during the six year period between 2017 and 2022. It includes the compensation paid only to the CEOs of the parent companies of the investor-owned utilities; it does not include compensation paid to the CEOs of those companies’ subsidiaries, nor does it include compensation paid to the companies’ other top executives. It also does not include compensation paid to the CEOs of non-profit utilities, such as electric cooperatives, municipal utilities, and the Tennessee Valley Authority.
When utilities had more than one CEO during the five-year period, we showed compensation for each CEO, which sometimes includes payments to two people in the same year. For incoming CEOs that were promoted from within the company, data for their compensation for their first year as CEO may include compensation they received that year in their earlier position, because corporate filings typically do not distinguish between the compensation they received for each position.
Data are from summary compensation tables published in companies’ 14A proxy statement or 10-K forms, filed with the Securities and Exchange Commission (SEC), or those forms’ equivalents for companies headquartered in countries other than the US.
EPI included in our analysis nearly all of the investor-owned electric utilities that are members of the Edison Electric Institute (EEI), and investor-owned gas utilities that are represented on the American Gas Association (AGA) board of directors. EEI is the trade association for investor-owned electric utilities in the US, and AGA is the trade association for investor-owned gas utilities in the US; several utility companies (or their subsidiaries) are members of both trade associations. A few EEI and AGA member companies are not included in this analysis, because their ownership structures do not require them to report this data to the SEC. We removed one utility that was included in an earlier analysis, South Jersey Industries, because it was purchased and no longer reports executive compensation to the SEC.
Further Reading
Utility CEOs received $2.7 billion in executive compensation from 2017 – 2021
