Criticism sparks TVA to evaluate CEO’S salary
White House questions whether $8 million a year is appropriate
Days after President Donald Trump publicly criticized Tennessee Valley Authority CEO Jeff Lyash’s salary once again, the new acting board chair of the federal provider said, “We’re going to be looking at that.”
John Ryder, a Memphian and the new acting chair of the TVA board after Trump fired Skip Thompson last week, said in an interview with The Commercial Appeal on Monday that the board of the federally owned public power provider will examine Lyash’s $8.1 million compensation package — Lyash is the highest-paid federal employee.
“It’s a lot of money. And we’re going to be looking at that and looking at ... what is the best way to do this? To handle the compensation and to structure the compensation so that we can resolve some of these tensions,” Ryder said.
Lyash, who has been on the job since early 2019, has been a vocal advocate for TVA as Memphis Light, Gas and Water has evaluated leaving TVA and buying power elsewhere.
On Friday, after Lyash and Ryder visited the White House on Thursday for a meeting with Chief of Staff Mark Meadows and Pat Cipollone, White House counsel, Trump weighed in on Lyash’s compensation during a news conference in Bedminster, New Jersey.
“And the head person — not controlled by government, but it’s sort of semi-public, in a sense — gets paid the highest salary in the world of government. He gets $8 million a year. That’s not a bad amount of money,” Trump said, according to the transcript released by the White House.
“It’s $8 million a year. And we are not accepting that. Even though we’re not the ones that appoint him or her — but, in this case, him — we’re not accepting somebody getting paid $8 million a year,” Trump said. “This has been going on for many years.
And we will do something about that, and we’re already in negotiations right now, including possible termination.”
By law, the president can’t fire the TVA CEO. It’s up to the TVA board. But Trump’s displeasure is what sent Lyash and Ryder to the White House last week. The planned outsourcing, and potential offshoring, of about 200 jobs triggered the president’s ire, leading him to fire then board chair Thompson. Trump and Vice President Mike Pence met with some of the displaced workers, according to the Chattanooga Times Free Press.
After the Thursday White House meeting, TVA announced it would rehire those workers, and Lyash said in a news release, “We were wrong in not fully understanding the impact on our employees . ... TVA fully understands and supports the Administration’s commitment to supporting and growing American jobs.”
On Monday, TVA spokesperson Buddy Eller said the meeting at the White House was positive and Ryder is “just getting up to speed on compensation and other issues. The board is committed to doing a review of compensation, but it is premature to say what that review looks like at this point.”
Ryder, a Memphis attorney, the former general counsel for the Republican National Committee and a Trump nominee to the TVA board, said the pressure from the executive branch is due to the unique role of TVA, a utility that functions similarly to a private company but is owned by the federal government.
“We’re an executive agency. And this is one of the things that comes with being a government entity. TVA is a hybrid. It is a government agency that is structured and set up, under the TVA Reform Act, to operate like a private company,” Ryder said. “And so
those things, occasionally, come into tension. But in this case, at the end of the day, we are a government agency and the president is the head of the executive branch of government, and he is entitled to request that government agencies adhere to the policy goals of his administration.”
Ryder, like outgoing U.S. Sen. Lamar Alexander, R-tenn., has before noted that Lyash’s salary isn’t an arbitrary figure, but is benchmarked to what private utility CEOS make.
“On the one hand, the salary is very high for a government employee. On the other hand, it’s very low for a utility executive,” Ryder said. “Lyash’s compensation is in the bottom 25% of the peer utility companies. It’s half of what the president of Duke Energy makes; it’s a third of what the president of Southern (Power) makes.”
In 2019, Southern CEO Thomas Fanning’s total compensation was $27.8 million, according to the Atlanta-journal Constitution. Lynn Good, CEO of Duke Energy, made about $15 million in total compensation in 2019, according to a Charlotte Agenda review of SEC filings.
Changing Lyash’s compensation, or that of any future TVA CEO, could require an act of Congress. TVA is governed by the TVA Act, which sets out that the CEO’S compensation be based on a survey of private utilities as well as the benchmarks of other heads of federal, local and state governments.
“We’re just starting to talk about how we’re going to go about reviewing this, and it may require an amendment of the act. If it does, that’ll be one of the things we’ll recommend,” Ryder said.
When asked if the decision to rehire the 200 employees had saved Lyash’s job, Ryder noted, “Well, the president had a press conference the next day and he seemed very pleased that that had taken place, so I think that’s a critical first step.”
Ryder said the White House meeting lasted 45 minutes to an hour, and he did not frame it as a negotiation.
“The White House made its position clear that they wanted these jobs restored. And we made our position very clear that we were willing to do that,” he said.
Samuel Hardiman covers Memphis city government and politics for The Commercial Appeal. He can be reached by email at samuel.hardiman@commercialappeal.com or followed on Twitter at @samhardiman.
Editor’s note: The reporter of this story owns common stock in two of the companies mentioned — Duke Energy and Southern Company.