Entergy union advocates compensation reform
A union representing workers at an Entergy Corp. nuclear power plant in Massachusetts said Thursday that it would push the company to allow shareholder input on the compensation of its top executives, which totaled more than $27 million last year.
According to Entergy's proxy statement filed in March with the Securities and Exchange Commission, chairman and chief executive officer J. Wayne Leonard, received $14.8 million in total compensation in 2006, a year in which the company dealt with the bankruptcy of its New Orleans subsidiary after Hurricane Katrina.
The Utility Workers Union of America local that represents workers at Entergy's Pilgrim Nuclear Station in Massachusetts said it filed a shareholder proposal urging Entergy's board to allow shareholders to cast an advisory vote on compensation packages of top executives.
An Associated Press calculation of total compensation put Leonard's figure at $15.5 million. That calculation included salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year -- and may vary from the company's reported total.
Entergy's SEC filing said four other top executives received compensation totaling $12.6 million.
Included were chief financial officer Leo Denault ($3.9 million), executive vice president of operations Mark Savoff ($2.7 million), utility operations president and chief operating officer Richard Smith ($3 million) and the company's chief nuclear officer, Gary Taylor ($3 million).
The union's move comes during a time of some investor dissatisfaction with the size of executive compensation packages.
Shareholders at Verizon Communications Inc., Blockbuster Inc. and Motorola Inc. have won votes giving them a say in executive compensation. But shareholders victories have been limited because mutual funds holding large blocks of stock often have backed companies in voting against the initiatives.
"Excessive compensation for top corporate executives becomes more of a scandal, every years," said union local president Gary Sullivan. "Our reform proposals would enable shareholders to communicate to Entergy's directors every year whether shareholders agree that executive pay levels established by the board are in the best interests of shareholders."
The proposal was submitted to Entergy for consideration at its 2008 annual shareholder meeting. The meeting date has not yet been set. The union said it would not attempt to obtain shareholder proxies for the proposal, and would instead encourage shareholders to adopt the idea.
Entergy spokeswoman Yolanda Pollard said the company was reviewing the request. She said Entergy's compensation packages are "competitive, but fair."
"The packages are designed to recruit, retain, motivate and reward leaders who can contribute to the long-term success of the company," Pollard said. "Retaining a credible executive leadership team at Entergy is a vital part of maintaining our reputation as an industry leader."
The union pointed out that Entergy New Orleans, the company's power and natural gas provider for New Orleans, received $200 million in federal hurricane recovery aid after flooding from Hurricane Katrina wiped out its system. Sullivan called that "unseemly" in light of the compensation packages.
But Pollard said the executive packages were only a fraction of the cost of business for Entergy New Orleans and the federal relief had helped stem additional costs being passed on to customers. In addition, she said management had been able to securitize storm damage costs to two other Entergy units in Louisiana, which also reduced customer costs.
Pollard also said the compensation packages were justified by the performance of Entergy's nuclear power unit and shareholders' return of 38 percent.
In trading Thursday, Entergy shares closed up $2.46, or 2.4 percent, at $106.29. The shares have traded in a 52-week range of $76.29 to $120.47. (AP)
