TVA gives $256 million in bonuses to 10,000 employees as CEO wraps a record salary year

TVA made $12.1 billion in total operating revenues for fiscal year 2023, a 3% decrease from the year before as its fuel rates and fuel sales decreased, according to the agency's annual financial report filed Nov. 14 to the Securities and Exchange Commission.

It said the lower revenue was “due to overall milder weather and lower sales to industries," even as Winter Storm Elliott last December led to rolling blackouts and peak summer power demands tested the company's electric grid.

The report offered a comprehensive look at TVA's finances for the fiscal year that ended Sept. 30, highlighting achievements as the agency celebrated 90 years and exceeded many of its goals.

While its net income fell to $500 million from $1.1 billion the year before, reflecting lower revenue and higher operating costs, the agency said it met or exceeded its key performance metrics and was confident in its financial outlook.

Its residential electricity rates were lower than 75% of the top 100 U.S. utilities and its industrial electricity rates were lower than 95% of the top 100 U.S. utilities, according to data released in June by the U.S. Energy Information Administration.

The report said TVA's low industrial rates were key to its ability to help attract $9.2 billion in capital investment from industries in its service area, which it said created 12,000 jobs and retained 46,000 jobs.

TVA also reported its lowest debt in 30 years, which it expects will boost ambitious investments in the near term.

“TVA’s stable wholesale rates, credits to customers and communities, and the benefits of our diverse power system all played a role in keeping TVA’s electricity costs among the lowest in the country,” John Thomas, TVA’s chief financial and strategy officer, said in a release. “TVA remains in the best financial health in decades."

The rosy evaluation will translate into high end-of-year payouts for all TVA employees, whose compensation includes at-risk pay that relies on company performance. This year, 10,421 employees will receive around $256 million in awards, with a median award of $9,965, a spokesperson for TVA told Knox News.

At its quarterly meeting in November, the TVA Board of Directors voted to give more than 10,000 non-executive employees nearly all of their expected at-risk pay, while executive payouts were docked slightly in light of the agency's first rolling blackouts last December and the death of a site foreman on the job.

The board also voted to make no changes to TVA CEO Jeff Lyash's compensation for the next fiscal year.

Lyash, the highest paid federal employee, made $10.5 million in fiscal year 2023, up from $9.8 million the year before, according to the report.

At $10.5 million, TVA CEO still makes less than peers

In order to pay its executives competitive salaries, TVA looks to peer energy companies, both public and private. Among these are Pacific Gas and Electric, where CEO Patricia Poppe made $51.2 million in 2021, and Duke Energy, where CEO Lynn Good made $21.35 million in 2022.

TVA's board said Lyash makes 29% less than the median CEO compensation at peer energy companies. His base salary was $1.2 million and his direct compensation was around $8 million. The rest of his compensation comes from his executive retirement plan and other incentives.

At $10.5 million, his total compensation is about 72 times that of the $146,466 median salary of TVA employees. That ratio is still lower than the ratio for other power providers.

Lyash’s compensation was increased for fiscal year 2023 “to reflect his leadership, performance, and experience," the report said. TVA is the nation's largest public power provider, serving 10 million people.

Though TVA's revenue is at the 54th percentile for peer companies and its employee count is at the 38th percentile, its generation capacity is at the 84th percentile, suggesting its efficiency is much higher.

Lyash was not the only executive whose compensation increased in fiscal year 2023 over 2022. The next four highest-paid executives also got a raise, according to data in the annual report:

• Jeff Lyash, chief executive officer: $10.5 million, an 8% increase. End-of-year payout: $1.3 million

• John Thomas, chief financial officer: $4.6 million, a 30% increase. End-of-year payout: $788,181

• Don Moul, chief operating officer: $3.6 million, a 1.2% increase. End-of-year payout: $750,649

• Tim Rausch, chief nuclear officer: $2.8 million, a 16% increase. End-of-year payout: $807,165

• David Fountain, general counsel: $2.5 million, a 21% increase. End-of-year payout: $519,941

TVA marks a year of successes, challenges

TVA's power generation was 55% carbon-free in fiscal year 2023, a feat made possible by a 3% increase in its nuclear generation capability. For the first time, all seven of its nuclear units were recognized as excellent by the Institute of Nuclear Power Operations this year.

Nuclear generation made up 42% of TVA's total power generation, and its three nuclear plants were unaffected by Winter Storm Elliott.

The agency's increased operational expenses were closely tied to its New Nuclear Program, created by the board last year. The program had spent half of its $200 million allocation by Sept. 30 and the agency had spent $191 million to develop next-generation small modular reactors at its Clinch River Site.

TVA's nuclear fleet, the third largest in the nation, allowed the company to rely less on purchased power from neighboring utilities.

In August, the company's system faced three consecutive days of peak power demands around 31,000 megawatts, and its grid met the demand. The company reported 99.999% grid reliability for the 23rd year in a row.

It has spent around $45 million in 2023 on winter readiness to avoid blackouts as the weather gets colder.

Daniel Dassow is a growth and development reporter focused on technology and energy. Phone 423-637-0878. Email daniel.dassow@knoxnews.com.

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This article originally appeared on Knoxville News Sentinel: TVA CEO Jeff Lyash highest paid federal employee salary 2023