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Pepco CEO made $11.4 million in 2012 despite utility’s spotty record
Question of the Day
Pepco has been faulted repeatedly for dismal reliability and the electric company’s hundreds of thousands of customers have little choice but to go with the monopoly, yet its chief executive’s compensation package rose from $6.7 million in 2011 to $11.4 million last year, financial documents filed last week show.
Joseph M. Rigby’s base salary increased from $880,000 to $985,000 in 2012, but the bulk of the compensation came in the form of stock awards, which increased from $2.3 million to $4.7 million; incentive payments, which increased from $748,000 to $1.2 million, and pension and deferred compensation, which increased from $2.5 million to $4.2 million, according to a Securities and Exchange Commission filing. This year, Mr. Rigby will see another raise, with his base salary increasing to $1,015,000.
In 2011, the company’s board froze Mr. Rigby’s base salary, citing reliability issues, but lush additional compensation packages ballooned his paycheck, which was $3.55 million in 2010.
“Pepco began a strategic initiative in September 2010 to improve reliability including trimming trees and replacing underground cable and power lines that span thousands of miles. From 2011 to 2012, outages on feeders we worked on as part of the improvement plan decreased day to day by 39 percent, and those outages that did occur were 42 percent shorter,” the company said in a written statement.
“The Board of Directors’ Compensation Committee noted his performance in executing our plans to improve and enhance reliability and customer service, and executing the company’s business strategy, including regulatory, financing and smart grid initiatives. The Compensation Committee also recognized that Mr. Rigby’s strong leadership has been essential to the progress the company has made to address the issues of reliability and customer service.”
Pepco’s service area covers all of the District and most of Montgomery and Prince George’s counties.
Pepco Holdings Inc. had an after-tax income of $285 million last year.
Officials said that although Mr. Rigby’s compensation, spread across Pepco’s 793,000 customers, was $15 per customer, “only a portion of Mr. Rigby’s compensation was included in cost of service and paid by ratepayers,” amounting to 48 cents per customer.
The utility’s 12 board members received an average salary of $172,000 last year.
Investigations have found that Pepco’s reliability lags behind its peers and that its excuses—often pinning the blame on trees—have not held muster.
In July, after a sudden and severe derecho storm caused hundreds of thousands of power outages in Pepco’s service area, members of the Montgomery County Council unleashed their frustration with the utility, publicly scolding the beleaguered company for what members deemed an “antiquated system” that “let [its] infrastructure go to hell.”
“The problem itself is Pepco, the values of the company and the management of the company,” council member Hans Riemer said.
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About the Author
Luke Rosiak is a projects reporter on The Washington Times’ investigative team. He formerly covered lobbying and campaign finance for two watchdog groups as well as transportation for The Washington Post. Luke can be reached at firstname.lastname@example.org.
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