Houston’s Longnecker & Associates Releases CEO Compensation Analysis Among Electric Utility Companies

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Findings of the Electric Utility Executive Compensation Survey identify a correlation of compensation to performance revealing a 50 percent increase in base salary from 2000 to 2011.

Longnecker & Associates

Longnecker & Associates

Longnecker & Associates (“L&A”), a Houston-based executive compensation and corporate governance consultancy, surveyed the total direct compensation of the Chief Executive Officers of approximately 65 electric utility companies, aiming to determining if there was an appropriate correlation of compensation to performance. The analysis, completed on behalf of Hearst Newspapers, included data from the companies’ annual public filings as reported in the Summary Compensation Table from 2000 to 2011.

Of the 10 CEOs ranked highest in total compensation, increases ranged from 7 percent to 147 percent, while their respective companies' stock prices increased from 3.5 percent to 16 percent. The median total direct compensation in 2011 was approximately $6.2M for the CEO position, resulting in a 156% increase from 2000. L&A found that base salary increased by 50% from 2000 to 2011, while annual incentives increased by 200% in the same period. Overall, there was an increase of the median total direct compensation by approximately 278% from 2000-2011, showing a steady increase from 2000 to 2007, and a sharp drop in 2008. For more information, Hearst Newspapers has fully disclosed the data through the Houston Chronicle Online.

L&A utilized S&P Capital IQ to compile a list of utility electric companies that were public or had public debt in 2011. Of those companies, L&A analyzed CEO compensation for the years each company was public, allowing for the identification of trends in CEO total direct compensation. Considerations for total direct compensation included: cash compensation, equity, and all other compensation such as change in pension value, nonqualified deferred compensation earnings, perquisites and other benefits.

About Longnecker & Associates
Longnecker & Associates is a large specialty firm focused on Executive and Employee Compensation for public, private and not-for-profit organizations. The team has the skills, experience, and strategic capabilities to help clients combat the intense scrutiny in today’s highly publicized corporate environment. Since being incorporated in 2003, Independence, Integrity, and Innovation have been the cornerstones of Longnecker & Associates. Such attributes have helped the firm build a distinguished reputation in the compensation and corporate governance arena.

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