Pepco's chief executive, Joseph Rigby, didn't get a salary increase last year because of "customer reliability issues," but he still managed to double his overall compensation, regulatory filings show.
Thanks mostly to an employment deal and supplemental executive retirement plan, Mr. Rigby's overall compensation rose to nearly $7.2 million last year, according to Securities and Exchange Commission filings.
With hundreds of thousands of Pepco customers in the District of Columbia and Maryland left without electricity for days in sweltering temperatures after a violent storm Friday, Mr. Rigby's compensation is likely to get a closer look as questions emerge about the company's performance in restoring power.
Pepco's proxy statement filed with the SEC this year specifically links the decision by the utility company's board of directors to freeze Mr. Rigby's salary in 2011 because of "customer reliability issues."
While the company's board of directors kept Mr. Rigby's salary last year at $880,000, the same salary he received the year before, that tells only a part of the story of the top executive's compensation. Overall, SEC filings put Mr. Rigby's 2011 compensation at $7.16 million, compared with $3.55 million in 2010 and $3.11 million in 2009.
What's more, Mr. Rigby signed a new three-year employment contract with Pepco in December that went into effect Jan. 1. Under that deal, his base salary will increase, too.
Explaining the decision to raise Mr. Rigby's salary by 11.9 percent next year to $985,000, the company disclosed in SEC forms that Pepco's compensation committee "recognized Mr. Rigby's strong leadership evidenced by his oversight of the company through reliability, customer service and reputational issues."
In addition, the company said that Mr. Rigby's salary had been below the median salary for his position and that none of its top executive earnings received "above-market earnings" through any of Pepco's deferred compensation plans.
In determining compensation, Pepco officials also said in the regulatory filings that they reviewed a host of factors, including experience and pay levels in the marketplace for similar positions.
Still, asked what effect freezing Mr. Rigby's pay would have on customer reliability, given that his overall compensation increased so sharply anyway last year, a Pepco spokeswoman said Mr. Rigby had been eligible for additional money but did not receive it.
Spokeswoman Courtney Nogas wrote in an email that the board committee overseeing compensation elected not to make awards for about $1.3 million in incentive pay for which Mr. Rigby had been eligible in 2011 "in view of the company's ongoing customer reliability issues."
She also noted, however, that Mr. Rigby "outlined his reliability and customer service improvement plan for the board at the beginning of 2010 and has since been successfully implementing that plan."
"The board of directors recognizes that Mr. Rigby's leadership has been essential to the progress the company has made, and has recently extended Mr. Rigby's contract for three years."
Pepco's outside board members, who approved Mr. Rigby's new employment deal, all received more than $100,000 in compensation in 2011. They also received corporate perks such as free downtown parking and tickets to sporting events, according to SEC forms.
A supplemental executive retirement plan approved by the company last July, described as the "SERP" in regulatory filings, helped boost Mr. Rigby's overall compensation.
"As a result of the establishment of the 2011 SERP and the execution of Mr. Rigby's employment agreement in December 2011 ... the net present value of Mr. Rigby's accumulated benefit under the 2011 SERP as of December 31, 2011 increased by $2,008,412," the company stated in SEC forms.
James Adams, communications director for Our DC, an advocacy group that has protested Pepco, said the company's executive compensation "represents a moral fracture you see in so many boardrooms where private citizens and average workers are excluded from the process."
Mr. Rigby has spent more than three decades at Pepco, serving as chief executive and president since 2009. His most recent employment contract began days after the Maryland Public Service Commission announced a $1 million initial fine against Pepco.
The commission announced in December that Pepco "failed to maintain its system properly over a period of years; that those failures subjected to customers to excessively high frequencies and long durations of electric outages during storm evens and on fair-weather days, and that Pepco compounded those reliability problems through poor customer communication."
In a statement following the fine, Mr. Rigby said the company did not plan to appeal the decision, though he added Pepco disagreed with the findings.
"We are very focused on the work we are doing to ensure that our customers have reliable power service," Mr. Rigby said. "While we do not agree with the commission's decision and we believe it is harsh, we have heard our customers loud and clear and our total commitment is to upgrading our system."
The company also said at the time that it had been working on a plan for more than a year to improve reliability and restore power faster.
By Tuesday, Pepco said it had restored power for three out of four outages after Friday's storm that initially left 443,000 customers without electricity.
Among those still without power Tuesday was D.C. Council member Marion Barry, Ward 8 Democrat, who said he met Tuesday with senior Pepco officials to discuss outages and restoration efforts.
Mr. Barry, who said his home and office phone have been ringing with calls from constituents still without electricity, said he told Pepco officials that the Congress Heights neighborhood where he lives always seems to lose power before other neighborhoods.
"When there's an outage in the city, we're the first to go," said Mr. Barry, who added that Pepco officials told him they would look into the problem.
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