Avista Chairman and CEO Scott Morris earned $3 million in total compensation last year, the utility reported Wednesday.
Morris has held Avista’s top executive job since Jan. 1, 2008. Compensation for the company’s top five executives was outlined in a proxy statement filed with the U.S. Securities and Exchange Commission.
Morris’ 2009 compensation package includes a $630,000 base salary; $582,026 in cash incentives; and $11,025 in other pay, including company matches for his 401(k) contributions.
Other items listed in Morris’ total pay package aren’t direct cash payments, said Jessie Wuerst, an Avista spokeswoman. The total includes a $691,983 increase in the value of Morris’ pension plan at retirement and stock awards valued at $1.1 million under accounting rules.
Wuerst said the stock-award figure reflects the value of Avista shares that Morris has the potential to earn over three years. However, Avista executives didn’t earn stock awards in 2009, she said.
In addition, base salaries for Avista’s executives were relatively flat in 2009, Wuerst said. Avista, which employs 1,500 people, compares its executive salaries to pay at other shareholder-owned utilities around the region. Base salaries at those utilities remained flat as well, reflecting the difficult economic environment, Wuerst said.
Morris’ total compensation package was $2.68 million in 2008.
Avista’s board of directors sets executive pay guidelines, including criteria for stock awards and cash incentives.
Ratepayers, through their utility bills, pay for 35 percent of executives’ salaries and cash incentives, Wuerst said. About 22 cents of an average utility bill goes toward executive pay.
Avista stockholders also contribute to executive pay. Stock awards and other executive compensation are paid from the company’s $1 billion in shareholder equity, which is the sum of its stock value and retained earnings.
Cash incentives reward Avista executives for meeting certain benchmarks that benefit customers, such as targets for the length of time needed to restore power after outages. Stock awards, when they’re given, reward executives for the company’s financial performance, including growth in the long-term value of Avista’s stock.