Hood
JACKSON, Miss. (Legal Newsline) - In addition to celebrating a Friday decision by the Louisiana Supreme Court, Entergy Corp. defended its executive compensation system Monday after Mississippi Attorney General Jim Hood criticized it in a press release.
Hood's release stated that Entergy CEO J. Wayne Leonard has collected $54.6 million in salary and other compensation during the past three years while the company made $13 billion in 2008. Hood filed a lawsuit against the company in December that alleged it is overcharging its Mississippi customers.
In his release, Hood said, "The average Mississippian cannot even comprehend a $54 million payday, let alone ever see a fraction of that kind of money in a lifetime."
Entergy spokesperson Mara Hartmann told Legal Newsline the company's executive compensation system is largely performance-based.
"Entergy's executive compensation program is designed to reward superior performance," she said. "The packages are meant to recruit, retain, motivate and reward leaders who can contribute to the long-term success of the company and thereby build value for our shareholders.
"If all performance goals are met, 65 to 80 percent of executive pay is tied to performance. It is 80 percent for CEO and 65 percent for other executives. The remaining percentage is base salary."
She said it benefits customers, shareholders and employees to keep strong leadership in place. She noted that in 2008, the company managed restoration hurricanes Gustav and Ike, dropped power outages by 47 percent and was named to the Dow Jones Sustainability World Index for the seventh year in a row -- the third consecutive year it was the only U.S. utility on the index.
Hood doesn't agree.
"(W)hen Entergy officials go before our Public Service Commission, insisting that the company has not been treated fairly and needs additional rate adjustments from its customers, it's a difficult story to swallow," he said.
Hood feels that Entergy Mississippi is buying gas at an inflated cost from the other Entergy companies, driving prices up for Mississippi consumers.
Entergy called Hood's CIDs a "fishing expedition" and feels the Attorney General's Office has no business investigating utilities.
A Friday ruling by the Louisiana Supreme Court reinforces the fact that utilities should be regulated by the proper authorities, Entergy Mississippi vice president of customer operations John Mullins said.
The New Orleans City Council decided in 2004 Entergy had to refund $7.2 million to customers, but that amount was increased to $34.3 million by the 4th Circuit Court of Appeals when plaintiffs claimed that Entergy New Orleans had recovered certain costs through its fueld adjustment clause instead of its base rates.
The Supreme Court ruling reinstates the original $7.2 million amount.
"In this case the Supreme Court confirmed the findings of the New Orleans City Council, Entergy New Orleans' regulators," Mullins said.
Hood has cited the case publicly as support for his standing to bring suit, even calling the claims made by him and those made in the New Orleans case "the exact same allegations."
From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.