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

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

    TVA, the nation’s largest public utility, sets executive compensation at lower levels than similar utilities. It receives no money from taxpayers and its executives are paid through electricity sales.

    Lyash’s salary is 18% below the average salary for peer CEOs, but his electricity prices are also lower than most of his peers.

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

    Only 14% of Lyash’s compensation and 25% of other top executives’ compensation is base salary. The rest is a complex mix of performance awards, retention incentives and deferred income, largely based on targets set by the TVA Board of Directors and Lyash.

    The board refused to give Lyash a raise for the second year in a row after reducing its maximum incentive payments in May and making sure he doesn’t make decisions that affect his own salary. About $8.1 million of Lyash’s total compensation is straight pay, with the rest held in pensions and deferred income.

    TVA included total compensation for its five highest-paid executives in its Nov. 14 annual Securities and Exchange Commission filing.

    What the top five TVA executives did 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, a 38 percent increase. Includes: $3.3 million performance-based payment
    • Don Moul, COO: $5 million, a 38% increase. Includes: $2.9 million performance-based payment
    • David Fountain, general counsel: $3.3 million, a 33 percent raise. Includes: $1.9 million performance-based payment
    • Tim Rausch, chief nuclear officer: $3.3 million, a 19 percent increase. Includes: $1.6 million performance-based payment

    VAT revenues rise after rate hikes

    TVA, which sells electricity to 10 million customers in seven states, reported total operating income of $12.3 billion from electricity sales for the fiscal year that ended Sept. 30. Revenue was up 2% year-over-year due to higher fares and higher sales volume.

    The VAT Council approved a Rate increase of 4.5%. in 2023 and a Rate increase of 5.25%. earlier this year, it is growing that local power companies like the Knoxville Utilities Board transmit power directly to customers.

    Despite the increases, which will generate nearly $1 billion by 2025 in funding new gas plants and updates to nuclear and hydropower, the total VAT customer rate was 2% lower this year due to cheaper natural gas prices.

    Executive salaries and earnings weren’t the only numbers to rise this year: Average annual compensation for all TVA employees rose to $163,799 from $146,466 last year. In total, TVA paid out $276 million in performance-based payments.

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

    The number of TVA employees increased to 11,267 employees from 10,795 last year. The ratio of CEO pay to average employee pay is 64 to 1, down from 72 to 1 last year. In addition to an “outstanding year of performance,” the higher wages are due in part to larger trends, Lyash said on a financial call.

    “Across the spectrum, businesses have seen some wage inflation, and so we’ve seen that in our pay rates for our union members as well as our non-union workforce,” Lyash said. “You see a little bit of upward pressure on hourly wages as a result of the macro trends that we’ve seen.”

    TVA bore it the highest peak power demand ever during a winter storm in January, and its dam system was shut down more than 400 billion gallons of flood water during Hurricane Helene, two accomplishments celebrated by the board and directors.

    The eight part-time members of the TVA board make stipends between $61,100 and $68,100, after slight raises this year, in line with other U.S. government employees.

    Trump stuck on the salary of TVA executives

    Executive pay at TVA has been a subject of scrutiny for years from elected officials and clients. The company sets payment at competitive rates in its governing document, VAT Lawrequires that pay be determined relative to private companies.

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

    The presidential salary of $400,000 is more than 25 times less than what Lyash earns.

    Later that year, Trump eliminated two members of the TVA councilincluding board chairman James “Skip” Thompson, and called for Lyash to be fired because of the utility’s outsourcing of IT jobs. Although the president can remove the members of the TVA board, he does not have the authority to remove the CEO.

    Trump may have a chance to nominate an entirely new slate of VAT board members during his second term, though nominees often face Senate confirmation delays. President Joe Biden nominated former Memphis City Councilman Patrice Robinson to fill a vacancy on the nine-member board last year, though she was not confirmed.

    TVA leaders have not spoken to Trump since he won the presidential election, but the utility would “flex our plan to reflect the administration’s policies, as we always do,” Lyash said.

    TVA and its local power companies received massive federal grants for clean energy and transmission upgrades funded by Biden’s climate spending bills.

    Daniel Dassow is a growth and development reporter focused on technology and energy. Phone 423-637-0878. E-mail [email protected].

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