Idaho Power CEO J. LaMont Keen‘s base salary rose by 45 percent between 2006 and last year, compensation records show.
Keen’s salary was $436,538 when he was appointed just over six years ago. By 2011, it had risen to $634,423.
“That’s a highly significant increase, especially in the years of recession,” said Harry Schum of Compensation Resources, Inc., a New Jersey-based consulting company that specializes in executive compensation plans. “It would tend to make me believe he was brought in below market level with an aggressive increase to market levels.”
In fact, that does appear to be the explanation for Keen’s rising rate of pay. According to Idaho Power, former company CEO Jan Packwood earned a base salary $630,000 in 2005, the year before Keen took the reins.
Why consider all of this? StateImpact lately has been covering a dispute that has big implications for Idaho’s wind industry. In the wake of a rush by wind developers to put up turbines in the state, Idaho utilities are petitioning to change the terms of their purchase agreements with independent power producers.
The utilities — primarily Idaho Power — say that wind power drives up customers’ rates. Wind industry representatives and those who favor independent power production say the utility is trying to protect profits. More than one source suggested we take a look at executive compensation.
After all, base salary figures represent only a fraction of total earnings. According to Forbes, CEO Keen’s total calculated compensation — which takes into account things like realized stock options — was just shy of $4.5 million last year.
Idaho Power said in a statement that maintaining low rates for customers is a separate issue from executive compensation. “We compensate our executive officers so as to attract and retain persons with the experience and capability to operate a complex utility,” the statement explained. “Were we not to pay market rates, we may be unable to retain our executives as they would have opportunities elsewhere, in which case less experienced persons would fill the roles.”