Connecticut Attorney General's Office
Press Release
Attorney General Says Executive Compensation Soars, Even As Public Utilities Seek Rate Increases
July 21, 2009
Blumenthal was joined by State Rep. Vickie Nardello, D-Prospect, House co-chair of the Energy and Technology Committee.
"Electric and gas consumers -- many losing jobs and homes -- are compelled to provide pay raises to utility executive millionaires," Blumenthal said. "These compensation disclosures should drive reform, and energize consumers who have endured rate increases over the past year. I urge legislation again to cap the expense to ratepayers for excessive executive pay."
Blumenthal successfully urged last year that the Department of Public Utility Control (DPUC) require that Connecticut's public utility companies disclose annually -- in a comprehensive, reader-friendly format -- all compensation paid to their executives and officers. As part of this new requirement, the companies recently filed 2008 executive compensation disclosures, revealing sky-high pay and benefit packages, largely at the expense of ratepayers.
Blumenthal, along with Consumer Counsel Mary J. Healey, also urged last year unsuccessfully a strict cap on ratepayer dollars to fund such pay. Under this proposal, ratepayers could not be charged more than $300,000 for any executive compensation -- an amount equal to twice the governor's salary.
In the fiscal year ended December 2008, Northeast Utilities CEO Charles W. Shivery received $8.09 million in total compensation, of which $1.3 million was paid by Connecticut ratepayers; United Illuminating (UI) CEO James Torgerson received $2.261 million, nearly all of which -- $2.256 million -- was paid by UI ratepayers; and the CEO of Connecticut Natural Gas (CNG) and Southern Connecticut Gas Company (SCG), Robert Allessio, received total compensation of $869,817, of which $748,480 was paid by Connecticut ratepayers.
Ratepayers paid tens of millions of dollars more in compensation to several other high-ranking company officials of these same companies.
"Ratepayers should be spared this outrageous burden when they are tightening financial belts and budgets, and struggling to make ends meet," Blumenthal said. "Even while United Illuminating sought to increase rates and reduce service, its CEO enjoyed a compensation increase of more than half a million from last year. And while Northeast Utilities failed to provide any rate relief to consumers, its CEO's total compensation increased by nearly a million.
"These compensation packages and pay increases -- in some cases coupled with rate increase requests -- are both insult and injury to consumers. As I proposed this year -- and I urge again now -- utility companies should be barred from forcing consumers to pay executive compensation beyond a strictly limited amount, twice the governor's salary. Had my proposal been implemented, consumers could have been spared paying several million dollars in executive compensation this year.
"Allowing executive pay raises that benefit only shareholders and burden only ratepayers is bad policy that demands change. I will reinvigorate my fight for this cap on consumer-funded executive compensation, and continue to battle bad rate increases as we have successfully done several times this year -- even winning rate decreases for CNG and SCG consumers."