The Virginian-Pilot
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Days before Dominion Virginia Power announced a rate increase last month, its parent company disclosed that its chief executive earned a compensation package worth $14.3 million in 2008.
Thomas F. Farrell II, chairman and CEO of Dominion Resources Inc., received 5.5 percent less than his 2007 package worth $15.1 million but nearly double his 2006 compensation, his first year in the job, according to the proxy statement dated March 20 by the Richmond-based company.
Farrell's 2007 earnings included a one-time $2 million bonus payment related to the sale of the company's gas and oil exploration and production division.
Dominion executives' compensation includes salary, stock options, a change in pension value and performance incentives. Farrell's package last year included $65,422 for his personal use of the Dominion corporate jet, according to the proxy statement.
Publicly traded companies send proxy statements to shareholders to announce their annual meetings and list matters up for a vote. A copy is also filed with the Securities and Exchange Commission. Dominion's annual meeting is set for May 5 in Philadelphia.
This year Dominion stockholders will consider a proposal that addresses executive pay. The Utility Workers Union of America, a labor group based in Washington, wants to let shareholders vote on an advisory resolution on compensation. The vote wouldn't change executives' awards but would give shareholders a way to voice their thoughts to Dominion's board of directors.
"We believe executive compensation at our Company has become clearly excessive," reads the union's supporting statement for the proposal.
Dominion opposes the proposal. "The board recognizes that executive compensation is an increasingly important area of shareholder concern and supports enhancing the dialogue between shareholders and directors," the opposing statement reads.
Compensation decisions involve a complicated process and financial information not available to shareholders, the company argues. Dominion's pay system "rewards superior performance when goals are met or exceeded," as they were in 2007 and 2008, the company says in the proxy statement.
Norfolk Southern Corp.'s chairman and CEO earned similar compensation in 2008 of $14.23 million, according to that company's proxy statement, released last month. CEO Wick Moorman's total package last year declined from 2007 because his stock-related awards fell in value.
Dominion Virginia Power submitted plans to state regulators last week for a series of rate changes that would result in a 6.9 percent increase by May 2010 to residential customers using 1,000 kilowatt hours of electricity per month. Under Dominion's plans, rates would drop for those customers by 3.3 percent in July to reflect falling wholesale fuel prices.
For September, Dominion has proposed a base rate increase - the first in 17 years - citing the need to meet growing demand. The base rate covers the company's operating costs plus a regulated return on its investments. Dominion also asked the State Corporation Commission for approval for several other charges to take effect by May 2010 to pay for new power plants, transmission operations and conservation programs.
Dominion derived about 20 percent of its 2008 earnings from its utility division, which serves all of Hampton Roads and northeastern North Carolina. Dominion Resources' operating profit climbed 9 percent in 2008, to $1.83 billion.
Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com
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does not operate this way. I am not sure he is aware of how to build a base that will endure and be loyal in times of high fuel prices as well as low. And I am saddened to see the lack of concern for the customers of Dominion Power. Their proxy btw was very misleading. It highlighted in red...THE BOARD RECOMMENDS YOU VOTE THIS WAY...and then is small letters...the shareholders object...Tactics like this make my heart sad..and wish the Mr. Capps were back in the driver's seat. I hope that the SCC does not pass this rate hike. You can contact them online and leave a comment for the case...the case number is pue2009-0019. It will be heard later this fall I guess.
Rate hike,oil prices,executive bonuses SCC case pue2009-0019
How out of touch Mr. Farrell et al is with the basic Virginian. Unlike his predecessor Mr. Capps I believe, Mr. Farrell doesn't seem to care at all about the efforts to include all Virginians in the exciting growth of Dominion Resources. When first begun, years ago, it was offered to all Virginians, the ability to participate and share in the profits of Dominion Resources. Such excitement. And with Mr. Capps at the helm, D. Resources was navigated with expertise and always a concern for the basic working Virginian. Now, the prices have doubled to invest online, the rates have gone up..which I could take last year since I saw prices of oil increased, but now...to fund these 'projects' at our expense during a time of economic hardship...well it is like with Mr. Farrell at the helm, Dom. Res. has lost its stewardship of people's money and basic values. It is like some graduates from business school want to exercise their ideas at our expense and reward themselves for it. To vote themselves a bonus and pay increase and then pass off a rate hike to us is poor business. Mr. Capps cared about making it possible for all Virginias to profit and invest in Dominion Res. Mr. Farrell apparentl
Bringing up the salaries of athletes
demonstrates a basic misunderstanding of the whole problem. The athlete does not have a fiduciary duty to the team. He is merely expected to play.
Comparing to athletes...
First of all, I also disagree with the salaries of athletes, however, paying them what they earn is the choice of the majority of Americans, who worship them. I am not one of them. Power in my home, on the other hand, is not an option. The problem with this man's salary is that people all over the area are going hungry and even going without power at all because the bills have skyrocketed, and now Dominion wants even more, while this demon collects more than everyone we know combined. It needs to be stopped.
A-roid makes 33 million a year
think about it a ceo of a successfull, well run company whick took him years to get to the topg gets 14 million a year. Poor little A Roid plays 160 games and practices makes only 33 million and poor Manny retard makes 23 million. Guess what we all pay in Virginia both of their salaries it is embedded in every thing we buy ( sponsership and cable tv) just like the power bill is over head to companies. They are half the ceos age. They have no real responsibilities except to wack and catch a ball and be jerks in public. No need for any higher education and get paid will or lose and have the fall and winter off. The average ball player made 3.2 million and that is just baseball! see todays paper.
How is the poor fellow every
How is the poor fellow every going to make ends meet with that drastic pay cut. I feel so sorry for him. It's almost as bad as being laid off. Of course, with the latest rate increase he should recoup all that lost income.Double his salary in three years? My Don Res stock has risen and in fact has lost value. Poor man. Wonder if he needs to borrow a dime?
If Va. Power can afford
this guys $14 million plus salary and pay for full page ads in the VP, then I think they can afford to absorb any rate increases. I guess he can afford the rate increase - we are paying for HIS electricity and ours.
The problem with the 'fair market value' approach
is that the incestuous nature of boards created the market. The pay scale keeps getting ratched up in part by boards/compensation committees who do not want to deny a raise in fears that when their salary comes into question, they would not receive their raises. Think about this: 12 years ago, the average CEO pay was 82 times the average blue collar salary. Today that ratio is over 400 times the average blue collar salary. This is not a 'free market' this is an inflated market. Those who argue that the salaries are the result of the free market are sticking their heads in the sand.
3747............?
LOL, you got to be kidding me! How about if all of us hardworking once middle class people paid less to feed the salaries of these overpaid paper pushers we would have more to spend in our community employing our neighbors. Trickle down economics!
The difference between him and other high-paid people mentioned
is that he doesn't really DO anything to warrant that kind of salary. Not to say that he shouldn't be paid a lot - he should be, he's a CEO of a large company - but his company is not a capitalist venture; it's a monopoly. It's not like a Cox/Verizon situation where customers have a choice, causing smart business to be played. It's simple really: if you want power you have to use his company. The more people move into an area, the more business he gets. (It is the same thing as with VA Natural Gas, although not everyone needs this product unlike electricity.) Therefore, unless he is working with city and state governments to physically increase the populations of his service area, then I do not see why he is paid such a ridiculous amount of money. Why not shave off $14 Million of it and not raise our rates? He can certainly live well on $300k per year.