Published February 12, 2021
Despite Claims From Former-President Donald Trump That The CEO Of The Tennessee Valley Authority Is Overpaid, Directors Voted To Raise His Compensation Package.
TVA President, Jeff Lyash, was the highest-paid federal employee in America in 2020, prompting criticism from Trump.
TVA directors voted on Thursday to raise Lyash’s compensation package, which totaled over $7 million last year.
Trump criticized the CEO in 2020, stating that his pay should be reduced.
“When we want them [TVA] to do something for us, they are not there for us, and that’s not good,” Trump said, citing his reasoning for Lyash to take a pay cut.
Lyash’s base salary in 2020 was $920,000, with a $5.97 million change in pension cost.
Steve Cohen, democratic representative from Memphis, agreed with Trump’s early criticisms of the federal utility but did not think the CEO was to blame.
Cohen said, “TVA’s salaries are out of line, and this doesn’t reflect on Jeff Lyash, who I think is a breath of fresh air at TVA. TVA compares his salary to that of the major private utilities, but those salaries, as are most of the CEO salaries in this country, are obscene. The disparity between what the CEO makes and what the average worker makes in this country is obscene and no one is worth this kind of money.”
Cohen said a big issue is the compensation packages given to top executives, as well as corporate jets and helicopters.
While Lyash has the ability to make more money, he still makes less than CEOs at other investor-owned utilities. The TVA act that is in place ensures that they pay competitive salaries in order to attract high-quality talent.
TVA Chairman John Ryder said that after Trump’s criticisms last year, the board hired outside consulting firms “to engage in a thorough review of executive compensation.”
The Thursday vote by the board to raise Lyash’s compensation was unanimous.
After the vote, Ryder said, “After a complete review, we came to the conclusion that the compensation system that we have is what is required by the TVA Act, which requires us to benchmark our pay against our peer utilities, and is the one that best serves the 10 million people of the Tennessee Valley we serve.”
Ryder, who is a former chief counsel for the Republican National Committee, was appointed by Trump last year after asking TVA to cut Lyash’s compensation. The Thursday vote goes against Trump’s initial request to “immediately” lower the CEO’s pay.
The chairman of TVA’s People and Performance Committee, Kelly Allen, said Lyash is “an inspirational leader” when citing what would make him eligible for a raise. She said he improved the overall performance of TVA while keeping electric rates low.
Allen was the one who proposed the pay raise, which will increase Lyash’s package from “37% to 28% below the market median of CEO compensation.”
While TVA is a federal utility company, they get funding from ratepayers instead of taxpayers. These ratepayers buy TVA generated electricity in the territory that the agency covers.