Published April 24, 2023
In 2015, the Securities and Exchange Commission adopted a rule requiring public companies to disclose how chief executive officer (CEO) compensation compares to median employee income. When the SEC began requiring companies to publish CEO to employee pay ratios, it provided consumers with a way of being more informed about the businesses they frequent, including the public utilities many of us pay for natural gas and electric service. Ultimately, many of the costs associated with compensating utility CEOs are borne by ratepayers, and, for that reason, we feel it is important to share some of those figures.
The compensation amounts below represent payments to the CEOs of parent corporations, whose subsidiaries include Minnesota utilities as well as other regulated and unregulated businesses. Most of these utilities requested rate increases over the past year. CUB has fought (and is fighting) to keep energy affordable by pushing back against the rate hikes sought by Minnesota Power, Xcel, and MERC. As Minnesotans face increasing costs for housing, food, and other necessities, the staggeringly high compensation of these companies’ CEOs is shocking.
For each of the companies below, CEO pay is compared to the median income of utility employees, as well as median household incomes in Minnesota. Although state income data has not been updated for 2022, the median household in Minnesota earned just under $78,000 in 2021, with half of the population earning less than this amount, and half earning more.
- CenterPoint Energy: CenterPoint Energy’s CEO was compensated $13.87 million in 2022, with a base salary of $1.42 million. The CEO was compensated 146 times more than the median CenterPoint employee earning $95,129, and 178 times more than the median Minnesota household.
- Northern States Power Company (Xcel Energy): In 2022, Xcel’s CEO was compensated $10.32 million, which included a base salary of $1.2 million, along with stock awards, pension increases, and incentive plan payments. Xcel’s CEO was compensated 86 times more than the median Xcel employee earning $119,851, and 133 times more than the median household in Minnesota.
- Minnesota Energy Resources (WEC Energy Group): Minnesota Energy Resources Corporation is a subsidiary of WEC Energy Group. The CEO of WEC Energy Group was compensated $8.15 million, with a base salary of $1.03 million. The CEO was compensated 68 times more than the median WEC employee earning $119,284, and 105 times more than the median Minnesota household.
- Great Plains Natural Gas (MDU Resources Group): Great Plains Natural Gas Co. is part of Montana-Dakota Utilities Co., a subsidiary of MDU Resources Group. The CEO of MDU Resources Group was compensated $5.26 million in 2022, with a base salary of $1.04 million. MDU’s CEO was compensated 54 times more than the median MDU employee earning $96,652, and 68 times more than the median household.
- Otter Tail Power Company: Otter Tail Power Co. is a subsidiary of Otter Tail Corporation. Otter Tail’s CEO was compensated $5.06 million, with a base salary of $775,000. The CEO was compensated 69 times more than the median Otter Tail employee earning $73,275 and 65 times more than the median household in Minnesota.
- Minnesota Power (ALLETE): Minnesota Power is an operating division of ALLETE, Inc. The CEO of ALLETE was compensated $2.34 million in 2022, with a base salary of approximately $696,000. The CEO was paid 21 times more than the median ALLETE employee earning $111,305 and 30 times more than the median household.
Public utilities may argue that these high compensation amounts are warranted. Managing a public utility is, of course, a complicated job and one that demands effective leadership. That said, utilities need to provide service in a cost-effective manner, such that the rates they charge are “just and reasonable” to ratepayers. It is hard to ignore how high these compensation levels are compared to that of the average Minnesotan household.
As consumer advocates, CUB is fighting utility rate hike requests and working to ensure Minnesotans receive reliable, clean, and affordable gas and electricity. As always, if you have any questions, feel free to contact us at 651-300-4701 or at firstname.lastname@example.org.
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