ConEd's Top Execs Rake In Bonuses After Sandy
Here's one from the "In Case You Missed It" file: Consolidated Edison, the same power company that stumbled badly in its efforts to get the lights turned back on after super storm Sandy brought swaths of New York and New Jersey to its knees in October, paid out more than $4 million in incentive bonuses to key executives.
No real news here, right? Let's face it – publicly-traded companies pay out big executive bonuses all the time, come rain, sun or – ahem – hurricane.
Yet here's the kicker: ConEd explicitly linked the payouts to the performance of what turned out to be a tumultuous year, which included Sandy, a work stoppage and a sweltering summer that triggered power outages across the city.
According to ConEd's proxy statement, the CEO, the CFO and the president deserved "recognition of their efforts in guiding ConEdison of New York through significant challenges encountered in 2012." Really?
Based on that logic, CEO Kevin Burke got more than $1.8 million, president Craig Ivey earned about $877,000, and CFO Robert Hoglund reaped nearly $500,000 in additional money. ConEd's general counsel and the head of its Orange and Rockland Counties unit raked in $420,000 and $716,600, respectively.
The sleuths over at Footnoted.com, which first reported on the filing earlier this month, point out a few things in ConEd's defense: namely, that the bonuses awarded last year were virtually identical to the previous two. And to be fair to the company, its compensation policies are based on a "peer group" formula that pays its executives roughly what other publicly-traded utilities earn.
"Con Edison responded to many significant challenges in 2012, and kept the power flowing reliably to nine million New Yorkers during a month-long work stoppage as temperatures soared last summer," the company said in an e-mailed statement in response to an inquiry from CNBC.com.
"In addition, all company personnel worked around the clock to restore power to more than one million customers affected by Hurricane Sandy and a Nor'easter that followed," the company added.
Having said that, 2012 could hardly be considered a banner year for ConEd's service delivery. Millions were left without power in the wake of Sandy – which plunged countless customers in lower Manhattan and elsewhere into darkness for days on end after the storm hit.
Meanwhile, spiking mercury last summer strained the city's power grid, leading to sporadic power outages across city. Those events dovetailed with a massive work strike which sparked a three-week lockout. (In the interest of full disclosure, your writer was directly affected by this. He was left to swelter mercilessly in his shoe box of an apartment in Flatbush, sans air conditioning, DVR and nary a place to charge the trusty iPad).
Footnoted.com ramps up what should be the outrage factor:
We were only without power for three days, but we know a few folks in Chappaqua, Bedford and North Salem who were out for a week or more. We'd love to know what they think about whether the annual incentives handed out to Burke et, al this year were actually earned, or just handed out as they have been the past few years.
It bears mentioning that the 2012 bonuses came on the heels of a whopping 82 percent surge in executive pay that ConEd doled out in 2011 -- another year in which city residents suffered through sporadic power outages in oppressive heat.
To paraphrase the immortal Maxwell Smart: guess that's why they pay them the big bucks.
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