Meet the 10 highest paid utility CEOs

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Compensation of utility CEOs is one of the worst-kept secrets in the industry, with the information publicly available online via a few simple clicks of the mouse.

What is less of a secret -- less obvious -- is why some CEOs earn the salaries and total compensation packages they do.

For example, although PG&E Corporation's CEO makes a cool $9 million-plus, he turned down additional compensation (performance-based) because he felt he had not put enough time in at the company.

In another example, in 2011, Dominion Resources' CEO received his first base salary increase in three years.

And did you know that Duke Energy's CEO receives no base salary at all? That's right -- nada.

It's amazing what can be uncovered when you delve beneath the surface. The following is a list of executive compensation for the 10 highest paid CEOs in the utility industry. The salary and compensation data was drawn from publicly available U.S. Securities and Exchange Commission filings. Total compensation includes base salary, annual incentive awards and long-term incentive awards like stocks, options and non-equity incentives and excludes other elements of pay such as changes in pension value and non-qualified deferred compensation earnings.

Company: PPL Corp.
Headquarters: Allentown, PA
View from the Top: William H. Spence, Chairman, President and Chief Executive Officer
Age: 55
Time as CEO:  Spence has been CEO since November 2011.
2011 Salary:  $788,951
Total 2011 Compensation:  $5,120,325

Notable:  Spence was elected CEO on November 17, 2011 and became Chairman on April 1, 2012. He now serves as Chairman, President and CEO.

Although Spence's total direct compensation was positioned significantly below market for comparable CEOs, Spence received a 6 percent increase in recognition of his contributions to the success of PPL operations, including the energy marketing, trading and generation operations, as well as in the company's energy delivery operations and oversight of the acquisition and integration of the Kentucky operations. He received an additional 11.6 percent increase in connection with his promotion to President and an approximately 22 percent increase in connection with his promotion to CEO. This brought his base salary within the competitive range for his position.

Spence replaced James H. Miller who had an annual base salary of $590,160 and earned a total compensation package of $12,053,378.

Sempra Energy
Headquarters:  San Diego, CA
View from the Top: Debra L. Reed, Chief Executive Officer
Age:  55
Time as CEO:  Reed became CEO on June 27, 2011.
2011 Salary:  $811,907
Total 2011 Compensation:  $8,179,678

Notable:  Reed was promoted to Chief Executive Officer from Executive Vice President on June 27, 2011, succeeding 64-year-old Donald Felsinger who remains Chairman of the Board and a member of the company's executive leadership team. In 2011, he earned a salary of $1,217,500 and a total compensatory package of $11,773,523.

From 2006 to 2010, Reed was President and CEO of San Diego Gas and Electric and Southern California Gas Company, Sempra Energy's regulated utilities. Reed is a 34-year employee of the Sempra Energy family of companies.

Reed currently serves as the Chair of the Board of Directors of the San Diego Regional Economic Development Corporation and on the Board of Directors of Halliburton Company.

   

Duke Energy Corporation
Headquarters:  Charlotte, NC
View from the Top: James E. Rogers, Chairman, President and Chief Executive Officer
Age:  64
Time as CEO:  Rogers has been CEO since Duke's merger with Cinergy Corp. in 2006.
2011 Salary:  $0
Total 2011 Compensation:  $8,780,258

Notable:  Duke does not pay its executive officers a base salary nor are they eligible for cash bonuses. Instead, compensation is contingent upon achieving specific performance results.

Duke's employment agreement with Rogers, effective February 19, 2009, says that Rogers is not to receive a base salary and is generally not eligible to participate in Duke's incentive compensation and benefit plans, including cash bonus programs. However, he is permitted to participate in Duke's health plans at his expense, as well as certain fringe benefits.

Rogers' compensation is higher than the compensation of other executive officers because market conditions dictate that a CEO with Rogers' skills and experience in the utility industry receive higher compensation than Duke's other executive officers. The main reasons for differences in compensation for each executive officer are competitive market conditions and individual performance.

On January 8, 2011, Rogers entered into a term sheet with Duke in connection with the announcement of the Progress merger, which amended the employment agreement to reflect the changes to his duties and responsibilities. Following the merger, Rogers would serve as Executive Chairman of the Board of Directors of Duke Energy and cease to be President and CEO. It also provides for Rogers' employment term to end on the second anniversary of the completion of the merger with Progress Energy or on December 31, 2013 -- whichever is later.

 

PG&E Corporation
Headquarters:  San Francisco, CA
View from the Top: Anthony F. Earley, Jr., Chairman of the Board, President and Chief Executive Officer
Age:  62
Time as CEO: Earley has been CEO since September 13, 2011.
2011 Salary:  $378,788
Total 2011 Compensation:  $9,541,387

Notable:  Earley replaced Peter A. Darby who retired as CEO effective April 30, 2011. Earley's official start date as CEO was September 13, 2011. Earley was eligible for a prorated 2011 STIP payment, but he elected to forgo the compensation because he was with the company for only a portion of the STIP performance period.

Base pay at PG&E Corporation is generally between 15 percent above and 15 percent below (the "15 percent band") the market median, while taking into consideration other factors relative to establishing individual pay levels. Base salary falls within a range of 12 to 40 percent of total compensation depending on officer level, as it is tied directly to PG&E Corporation's performance for shareholders through short-term and long-term incentives.

For 2011, an average 2.8 percent base salary increase was approved for officers.

Prior to joining PG&E, Earley held executive positions at DTE Energy Company and Long Island Lighting Company. Earley has extensive knowledge and experience across all aspects of the energy industry, including electric and gas utility operations, nuclear energy, and energy policy and regulation, as well as executive management, business, and civic leadership.

 

Xcel Energy Inc.
Headquarters: Minneapolis, MN
View from the Top: Benjamin G.S. Fowke III, Chairman of the Board, President and CEO
Age: 53
Time as CEO: Fowke has been CEO since August 2011.
2011 Salary:  $986,979
Total 2011 Compensation:  $9,676,420

Notable:  Fowke's base salary increased from $690,000 in 2010 to nearly $987,000 as a reflection of his new CEO role.

Fowke replaced Richard C. Kelly, Xcel's previous Chairman and CEO, who resigned on August 24, 2011 and retired on September 16, 2011. In 2011, Kelly had a base salary of $890,152 and earned a total compensation package of $6,376,165.

Before becoming CEO, Fowke held a variety of executive positions at Xcel, including President and COO, Executive Vice President, and Vice President and CFO.

Currently, Fowke serves on the boards of a number of industry groups, including the American Gas Association, Nuclear Energy Institute, Electric Power Research Institute, Edison Electric Institute, and the Institute for Energy Efficiency, among others.

 

Edison International
Headquarters: Rosemead, CA
View from the Top: Theodore F. Craver Jr., Chairman of the Board, President and CEO
Age: 60
Time as CEO:  Craver's first full year as CEO was 2009.
2011 Salary:  $1,142,115
Total 2011 Compensation:  $10,843,523

Notable:  When Craver was elected CEO in 2009, his compensation was low relative to other industry CEOs.

Craver's total salary increased $100,000 between 2010 and 2011 with Craver's total direct compensation up nearly $400,000 since 2010. This can be attributed to increases in base salary and long-term incentives as a percentage of salary in order to bring compensation closer to the market median of comparable companies like Sempra, PG&E, FirstEnergy, Dominion, Duke, and Xcel.

Craver serves on the board and executive committee of the Edison Electric Institute, an association of U.S. shareholder-owned electric companies, and chairs the Electric Power Research Institute, a provider of independent, public-benefit research and development relating to the generation, delivery and use of electricity.

 

Consolidated Edison Inc.
Headquarters: New York, NY
View from the Top: Kevin Burke, Chairman of the Board, President and Chief Executive Officer
Age:  61
Time as CEO: September 1, 2005
2011 Salary:  $1,177,633
Total 2011 Compensation:  $10,965,047

Notable:  Burke has been President and CEO of Con Edison, and CEO of Con Edison of New York since September 2005. Previously, he was President and COO of Con Edison of New York. Burke has been a Director of Con Edison, a Trustee of Con Edison of New York, and Chairman of the Board of Directors of Orange & Rockland, a Con Edison subsidiary, since October 2005.

Burke serves as a Director or Trustee of American Gas Association, Honeywell International, Edison Electric Institute, Institute for Electric Efficiency, Mayor's Fund to Advance New York City, New York State Energy Research and Development Authority, and Partnership for New York City, among others.

Con Edison is one of the nation's largest investor owned utilities, with approximately $13 billion in annual revenues and $40 billion in assets. Con Edison's earnings per share increased by 10 cents -- from $3.49 to $3.59 -- in 2011. The dividend increased another two cents per share in January, rising to $2.42. Con Edison has raised its dividend for 38 consecutive years, making it the only utility in the S&P 500 that has done so for more than 30 straight years.

 

Wisconsin Energy Corp.
Headquarters: Milwaukee, WI
View from the Top: Gale E. Klappa, Chairman of the Board, President and Chief Executive Officer, Wisconsin Energy Corp., WeEnergies and Wisconsin Gas
Age: 61
Time as CEO: Klappa began his role as CEO for Wisconsin Electric Power Company and Wisconsin Gas in 2003.
2011 Salary:  $1,174,168
Total 2011 Compensation:  $11,346,447

Notable:  In 2011, Klappa's annual base salary increased by approximately 4 percent. However, due to Klappa's eight years of service as CEO -- longer than many CEOs at comparable utilities -- his annual base salary was adjusted, bringing it to just less than 1 percent above those CEOs who had served their positions for more than five years.

Klappa is Chairman of the Board, President and CEO of Wisconsin Energy Corp., WeEnergies and Wisconsin Gas. Klappa has been CEO of Wisconsin Electric Power Company and Wisconsin Gas since 2003; and CEO of Wisconsin Energy Corporation since 2004.

Klappa has more than 37 years of experience in the public utility industry, 19 at a senior executive level. Prior to joining Wisconsin Energy, Klappa served as Chief Strategic Officer, Executive Vice President, and CFO of Southern Company.

Electric Light & Power magazine named Klappa CEO of the Year in January 2012 for his role in executing Power the Future, which added 50 percent more generating capacity to the company's operating fleet while cutting emissions of sulfur dioxide, nitrogen oxide and mercury by 70 percent.

 

Dominion Resources Inc.
Headquarters:  Richmond, VA
View from the Top: Thomas F. Farrell II, Chairman, President Chief Executive Officer
Age:  57
Time as CEO:  Farrell served as CEO since January 2006.
2011 Salary:  $1,220,000  
Total 2011 Compensation: 
$13,993,328 

Notable:  All of Dominion's executive officers received a 2 percent base salary increase in 2011--Farrell's first base salary increase since 2008.

Farrell's compensation, though based on the same philosophy as the company's other executive officers, is much higher relative to others. His compensation is commensurate with his greater responsibilities and decision-making authority, broader scope of duties encompassing the entirety of the company and his overall responsibility for corporate strategy, as well as his role as the company's principal corporate representative to investors, customers, regulators, analysts, legislators, industry and the media.

Approximately 88 percent of Farrell's targeted 2011 total direct compensation is performance-based and tied to pre-approved performance metrics or stock performance. Despite 2011's continued global economy and financial market uncertainty, Dominion's performance was strong, producing a total shareholder of 29.4 percent, or fifth relative to industry peers.

 

FirstEnergy Corp.
Headquarters: Akron, OH
View from the Top: Anthony J. Alexander, President and Chief Executive Officer
Age: 60
Time as CEO: Alexander has served as CEO of the company since 2004.
2011 Salary:  $1,340,000
Total 2011 Compensation:  $18,328,895

Notable:  In 2011, salary increases for top executives at FirstEnergy ranged between 61 and 101 percent due, in part, to the company's February 2011 merger with Allegheny Energy, which generated a series of grants and awards, and made FirstEnergy one of the largest investor owned utilities in the nation.

Alexander received a 62.1 percent raise in 2011, but was not the highest paid FirstEnergy executive. Before the merger, Paul J. Evanson, Allegheny President and CEO, held the title of "highest paid" with $14.48 million in compensation. Evanson retired at the end of May 2011.

Alexander is a Director of Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Metropolitan Edison Company, Pennsylvania Electric Company, and FirstEnergy Solutions Corp.

 

 

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