Public
Funded
Salaries
How much
is too much?
by Jennifer Williams
This is part 3 of a 5 part series on key issues creating ethical concerns on the government-allowed utility monopoly.
As Evergy is continuing to request increases in rates, is the public aware of how their current budget is being spent? Do they know that the Evergy CEO was compensated over $6.8 MILLION in 2022, Board of Director salaries averaged over $333,000, and stockholders received over $534 MILLION in total dividends paid? Are they aware that executives are rewarded for implementing the global ESG plan, including Evergy’s adherence to the UN 2030 Agenda for Sustainable Development, or that Evergy spends countless hours and dollars in lobbying and campaign donations?
Has the public read Evergy’s company policies that govern their practices? Most likely not.
Below are 5 areas of concern with Evergy’s current business practices that should make anyone, including Kansas legislators, question if the utility monopoly model is still an appropriate method or if it is becoming a method of forcing the public to pay for failing systems that are making executives and investors rich; while leaving the tab with those struggling just to pursue life, liberty, and happiness. Perhaps it is time for another approach to be explored.
This is part 3 of a 5-part Series to address the major concerns in the following categories that are affecting customer rates and the future of our monopolistic public utility.
Hefty Dividend Payments to Shareholders
ESG & “Renewable” Programs
Executive Salaries
Campaign Contributions
KCC and CURB
Executive Salaries
How much is too much when it comes to executive and board of director salaries of public utilities?
Rate-payers spent $8,652,707 in direct salaries and cash bonuses (over $1,400,000 on average for each) for the top 6 executives and paid the 11 directors $1,413,901 in total direct pay.
That’s over $10 million in cash paid for 17 people. This does not include stock incentives and other considerations, which would bring the total to over $22.2 million.
Below is a breakdown of each executive, including base salary, bonus, and stock; followed by a breakdown for each director. Read footnotes and details on the 2023 Anual Meeting and Proxy Statement.
In 2022, President and CEO, David Campbell, had a base salary of $1,029,423 plus a cash bonus of $1,487,063 for total cash compensation of $2,516,486. With all of his stock awards and incentive plans, his total 2022 compensation package was $6,888,316 (down from his 2021 total compensation package of $11,138,082)
Executive Vice President and CFO, Kirkland Andrews, had a 2022 salary of $717,163 plus a cash bonus of $828,713 for total cash compensation of $1,545,876; with a total annual compensation after incentives of $3,053,393 (down from 2021 total of $6,896,928)
Executive Vice President and COO, Kevin Bryant, had a 2022 salary of $629,712 plus a cash bonus of $582,120, for a total cash compensation of $1,211,832, with a total annual compensation after incentives of $2,532,467 (after a $24,379 increase in pension value per Exec Compensation Table below))
Senior Vice President and Public Affairs Officer, Charles Caisley, had a 2022 base salary of $514,711 plus a cash bonus of $386,694, for a total cash compensation of $901,405, with a total annual compensation after incentives of $1,698,257 (after a $9,983 increase in pension value per Exec Compensation Table below)
Senior Vice President and General Counsel, Heather Humphrey, had a 2022 base salary of $530,202 plus a cash bonus of $398,244 for a total cash compensation of $928,446, with a total annual compensation after incentives of $1,762,046 (after an $18,115 increase in pension value per Exec Compensation Table below)
Past Executive Officer, Greg Greenwood, had a 2022 salary of $288,952 plus a $1,258,876 “other compensation” for severance pay and consultation fees; with a total annual compensation after incentives of $2,608,121 (after a $319,352 increase in pension value per Exec. Compensation Table below).
In part 3 ESG, the following charts and statements were presented regarding the metrics used to award bonuses.
“In 2022, we added an environmental metric to the performance-based RSUs based on total megawatts of owned renewables additions or buy-ins of PPAs by year-end 2024, among other changes. The 2021 changes that we continued into 2022 include the discretionary DE&I and Key Performance Indicator modifiers to the AIP that reinforce our commitment to improving our DE&I goals and assess our progress on the Company’s business plan. We also continue to measure cumulative adjusted EPS in the 2022 performance-based RSUs to support achievement of our long-term strategic plan and because of its alignment with shareholder value creation. The goals and targets for our 2023 executive incentive plans are aligned with our strategic business plan.”
2023 Annual Meeting and Proxy Statement pg 44
Would it be considered a bribe to give massive stock options and performance incentives for the implementation of a global agenda? Is it a conflict of interest for executives and directors to be involved in decisions that award such high dividend payouts when they own so much stock themselves and are the benefactors of the excessive dividends authorized?
Evergy believes this to be a good arrangement and claims their policy is to make sure the executives are fully committed to promoting shareholders’ interests. They believe that requiring ownership in the stock ensures they do everything necessary to maximize earnings per share.
However, since they are directly benefitting from this arrangement, on top of very lucrative pay for other compliance behaviors, where is the line between a duty owed to keep the rates down for the customers that are forced to buy from them vs their desire to keep earnings per share high for themselves and other shareholders?
This entire arrangement seems like a giant crime against the public, and the customers cannot even refuse to participate – unless they want to live off-the-grid and do without certain amenities that public utilities are supposed to provide.
A State-Mandated Monopoly should not legally be allowed to force customers to pay such exorbitant salaries and shareholder dividends; while forcing them to participate in morally-conflicting socialist ideologies that clash with their moral compasses and threaten their freedom.
Top executives are not the only recipients of excessive salaries. Take a look at the non-employee Board of Directors’ compensation, averaging over $333,000 a year for a total Director compensation with incentives of $3,863,559
These Directors serve on several committees, including committees that decide compensation, the nomination of new directors, shareholder engagement, ESG policies, and other corporate governance issues.
Evergy’s Corporate Governance Guidelines, amended December 2022, covers the Board members’ responsibilities, Board composition, company expectations, and Board compensation as it relates to stock ownership. This document states, “The Nominating, Governance, and Sustainability Committee is responsible for evaluating and recommending to the Board qualified candidates to become members of the Board and recommending that the Board select candidates for any vacancies or directorships to be filled by the Board or by shareholders at any annual or special meeting. Shareholders also can nominate directors in accordance with the By-laws of the Company.”
This document also states expectations of stock ownership, which further encourages the executives to continually promote the ESG policies in order to earn enough stock to meet their stock ownership contractual requirements. This is just setting the entire system up to promote the outside agenda at the expense of the people – both monetarily and morally.
Stock Ownership
To further align the interests of the Company’s Directors and Officers with shareholders,
the Board has established minimum stock ownership guidelines.
Directors are expected, within five (5) years of their initial election to the Board, to acquire
and hold Company stock or Company deferred stock units with a value equal to at least five (5) times the amount of the annual non-employee director cash retainer.
Officers are expected, within five (5) years of their initial appointment as an officer or
promotion to next level, to acquire and hold Company stock (including unvested restricted equity and shares owned in a 401(k) plan) with a value equal to the following:
CEO 6 x base salary
President 4 x base salary
Executive/Senior Vice Presidents 3 x base salary
Vice Presidents 2 x base salary
To add insult to injury, who are the members serving on the Board of Directors, and what are their motives or agendas? Below are 3 members from outside of Kansas (and are not affected by their own decisions) who have questionable conflicts in the eyes of the public.
C. John Wilder
Mr. Wilder is the Executive Chairman of Bluescape Energy Partners LLC. (Evergy sold this company 2,269,447 shares of common stock in 2021 with a warrant to purchase up to 3,950,000 additional shares.) He serves on the boards of directors of several private portfolio companies and has previously served on the board of many private and public companies, including NRG Energy, Inc. and TXU Corp. He served in executive officer roles in TXU Corp., Entergy Corp. and Royal Dutch/Shell Group.
The 12th largest shareholder (who could quickly become the 6th largest if they purchase the additional allowed shares) should not have a representative on the board promoting the ESG policies of Bluescape Energy Partners LLC or recommending the dividends per share that directly benefits Bluescape Energy Partners LLC.
Mary L. Landrieu
Louisiana Senator Mary Landrieu was a member (and then Chair) of the Senate Energy and Natural Resources Committee during her tenure which ended in 2014. Prior to serving in the U.S. Senate, she served in the Louisiana State Legislature. Senator Landrieu currently serves as Senior Policy Advisor at Van Ness Feldman LLP, a law and government relations firm, specializing in energy, environment and natural resources law.
Ann D. Murtlow
Ms. Murtlow is an Indiana resident who is a former member of the Board of Directors, President, and Chief Executive Officer of the United Way of Central Indiana.
She currently serves on the Compensation and Nominating, Corporate Governance and Sustainability Committees for Wabash, a transportation logistics company. Previously, she served as President, Chief Executive Officer, and Director of Indianapolis Power & Light Company and IPALCO Enterprises.
Why is Evergy allowed to promote these ESG practices, while rewarding executives and directors to further their implementation, paying exorbitant salaries, bonuses, and benefits, while hiring and appointing individuals with perceived conflicts of interest who only perpetuate the problem of the rising cost of utilities?
The public is hurting. Bank balances are down and credit card debt is up – all because of the increased cost of living that is snowballing with every budget increase for every necessary expense the citizens are forced to incur to survive.
That is the mode they are in – surviving, not thriving.
Meanwhile, the executives in these organizations are making bank, and no one is talking about it!
But who has the authority to regulate this?
It is a government-regulated monopoly and the power lies with the Kansas Legislature – and Evergy (and other utility companies) and their lobbyists know it.
Read more in Part 4 – Lobbying and Campaign Contributions