A class-action lawsuit, member demands, and a state senator’s continued pressure have finally forced the Pedernales Electric Cooperative to pry open the doors of secrecy that have surrounded its business for decades.
On Tuesday, the PEC disclosed that General Manager Bennie Fuelberg’s 2006 compensation was more than twice the figure touted by the co-op during the summer and fall. For 2006, Fuelberg was paid approximately $396,000 in base salary, as well as a car allowance and bonuses, plus an additional $475,000, which included deferred compensation of approximately $450,000.
The deferred compensation was approved by the PEC’s Board of Directors in 2004 in a retention agreement with Fuelberg. Anne Harvey, a spokes person for the PEC, said that the retention agreement did not vest until 2006. Board Vice President E.B. Price confirmed that Fuelberg’s total compensation package for 2007 will be approximately $1.4 million.
Senator Troy Fraser has been a driving force in opening the books at the PEC. Fraser said, “Although Fuelberg has done a good job, his compensation is far in excess of what is appropriate for the position.”
Besides the deferred compensation payments of $450,000 in 2006 and $1 million in 2007, the retention agreement calls for Fuelberg to receive another $450,000 if he is still employed in January of 2008, according to Fraser.
Asked if Fuelberg had offered to forego receiving any further payments under the retention agreement, Price said that Fuelberg “wished there was some way he could” forego receiving the deferred compensation amounts but that Fuelberg feels that his contract requires that he accept the payments until he retires.
In a conference call Wednesday with Price, Board Advisory Director Libby Linebarger, and PEC staff, Linebarger said she could not conceive of operating the PEC without a chief executive officer in place and therefore did not anticipate Fuelberg retiring before a successor is hired.
Fuelberg has announced he will retire as general manager once a successor is selected. PEC Board President Bud Burnett announced his retirement to take effect “no later than June 2008.” Burnett’s $191,000 in compensation for a position designated as “Cooperative Coordinator” had been previously disclosed by the PEC and questioned by members. Fraser said that position was abolished a few days ago, but that Burnett still draws his compensation as a director on the PEC board.
Prior to Tuesday’s announcement of Fuelberg’s compensation of more than $871,000 for 2006, the PEC blanketed its membership with charts analyzing Fuelberg’s compensation in relation to other co-ops’ top executives. However, Tuesday’s announcement reveals that the PEC charts did not use Fuelberg’s full compensation amounts in their analysis.
These highly publicized charts prepared by the PEC used only part of the compensation the board approved for their general manager. The charts showed only Fuelberg’s 2006 IRS W-2 compensation of $391,652 to place him 4th in compensation behind the CEO of Connexus Energy’s $702,209 in 2004 IRS 990 Form compensation.
In response to questioning the decision to use of these charts, Price said that he felt the PEC board had been candid and truthful to its members.
Asked if he would have done anything differently as a board member over the past year, Price said there is always room for improvement and he would have done some things differently. In particular, Price said he would have spent more time “on member satisfaction” rather than focusing on “customer satisfaction.”
Fraser is concerned that the PEC board “refused to address their own salaries.” Linebarger said that the board decision not to review their own salary was made on the advice of their attorneys because board compensation is part of the ongoing class-action lawsuit against the PEC. Linebarger could not explain why the board okayed action to change other aspects of PEC operations that are also part of the lawsuit but that do not affect directors’ compensation.