Does competition justify higher salaries for utility executives? Some regulators have suggested the opposite. Others argue that ratepayers must benefit directly from any incentives offered to utility managers.
The Vermont Public Service Board (PSB) recently forced stockholders to pay a share of executive compensation costs for two utilities (em Green Mountain Power Co. and Central Vermont Public Service Corp. (em that exhibited higher-than-average executive compensation, and capped compensation for rate cases. It acknowledged rising electric competition, but stressed that utilities still acquire the vast majority of revenues from captive ratepayers. Claims by the utilities that competition demands higher pay for executives were rejected as the PSB observed that it might be equally logical to argue that the prospect of competition should exert downward pressures on all costs, including those for executive payroll.