Compensation for Avista Corp.’s top executive nearly doubled last year, as a result of bonuses and increases in pension values.
Scott Morris, chairman and chief executive officer of the Spokane-based utility, received nearly $5.5 million in total compensation in 2014, compared to $2.9 million in 2013.
Morris’s base salary grew 3 percent to $723,461, according to the company’s preliminary proxy statement filed Friday with the U.S. Securities and Exchange Commission.
He also received two cash bonuses. Morris received a $191,506 bonus from last summer’s sale of Ecova, Avista’s energy management subsidiary. And he received a cash award of $1.1 million because the utility met or exceeded goals related to things such as customer service satisfaction, earnings per share and targeted times for restoring power after outages. He also received $238,340 from the company’s 401(k) match, cashed-in vacation time and sale of Ecova stock.
The biggest increase in Morris’ salary came from $1.6 million gain in the value of his company pension plan, based on actuarial tables. The stock market’s strong performance was reflected the increase in value, said Jessie Wuerst, an Avista spokeswoman.
Morris only receives part of his total compensation as “take-home” pay, she said. About $1.5 million of the 2014 compensation package reflects future stock awards that Morris could earn if Avista meets certain targets over a three-year period.
Morris, 57, has led Avista since January, 2008. The company provides electric and natural gas service to more than 600,000 electric and natural gas customers in Eastern Washington, North Idaho and Oregon.
A typical household pays about 24 cents each month on their bills for Avista’s top five executives’ salaries and cash awards, Wuerst said.
“This perception that because bills are going up, all this money is going into Scott’s pocket is just erroneous,” she said.
Avista stockholders also contribute to executive pay through stock awards, Wuerst added. Stock awards are paid from the company’s shareholder equity, which is the sum of its stock value and retained earnings.
Executive pay is scrutinized by public utilities commissions in Washington and Idaho, which decide whether Avista can raise its electric and natural gas rates. Earlier this month, Avista filed a request in Washington that would raise combined electric and gas bills by nearly $12 per month for a typical household. The company is also seeking an $8.50 increase in basic monthly fees.
Though executive pay accounts for a small portion of customer bills, it’s a topic of interest to Washington Attorney General’s Public Counsel Division, which advocates for residential and small businesses in rate cases, said Lisa Gafken, an assistant attorney general.
In 2012, the Public Counsel Division challenged the amount of executive pay reflected in Avista’s customers rates. The challenge wasn’t successful, but it started a discussion at the Washington Utilities and Transportation Commission about executive pay, she said.
Avista and other utilties survey what peer companies are paying their executives, and adjust their pay according. So, the raises can become a self-perpetuating cycle, Gafken said.
Other top executives at Avista also earned more last year. Total compensation packages for 2014 include:
Mark Thies, senior vice president, and chief financial officer, $1.7 million.
Dennis Vermillion, senior vice president and environmental compliance officer, $1.8 million.
Marian Durkin, senior vice president, general counsel and chief compliance officer, $1.5 million.
Karen Feltes, senior vice president and corporate secretary, $1.5 million