Friday, July 19, 2013

Outrage: Citizens Energy Board Voted Itself 34-Fold Increase In Its Pay After Water Company Deal

A week after the Citizens Energy board of directors stepped forward to publicly defend a doubling of CEO Carey Lykins' pay to nearly $3 million a year, along with huge pay raises for its other top executives, the Star's Tony Cook learns that the board increased its own pay by 34-fold following the approval of the purchase of the city's water company, which company executives assured Indianapolis ratepayers would lead to reductions in future rate increases before seeking another double-digit rate increase in water rates. Citizen Energy's board members had been earning a token $600 a year for their service on the nonprofit board before the merger. Immediately after the merger, the board voted to increase its annual pay to $20,600 a year for regular members and to $25,000 for executive committee chairpersons.

According to Cook's story, the board sidestepped a state law limiting the pay of board members to $600 a year by creating additional executive committees to which all the board members were appointed, who may earn a "reasonable" additional compensation under state law. As I earlier reported, Citizens' Energy's Chairman, James McClelland, also earns more than $500,000 a year as President of the nonprofit Goodwill Industries of Indiana. Other board members include very high-paid executives, retired and active, and highly-paid nonprofit executives, including: Daniel Appel, Gregory & Appel Insurance; Moira Carlstedt, President, Indianapolis Neighborhood Housing Partnership; Anita Harden, Retired President of Community East Hospital; Jeffrey Good, Director, Milestone Advisors;  Anne Nobles, Retired VP of Eli Lilly; Phillip Terry, CEO, Monarch Beverage
Christina Hicks, VP, Human Resources, Wishard;  J.A. Lacy, CEO, LDI.

Citizens Energy also has a 5-member Board of Trustee, including the following high-paid private and public officials: Dan Evans, IU Health Partners;  Dennis Bland, President, Center for Leadership Development;  Kathryn Bentley, Civic Leader;  Jackie Nytes, CEO, Indianapolis Public Library; John Krauss, Director, IU Public Policy Institute. As a former city-county council member, Jackie Nytes was at the forefront in the push to approve the merger deal with Citizens Energy. She was promptly rewarded with the job as the library's new CEO earning nearly $150,000 a year. Cook's story doesn't mention what, if any, pay they receive for their service.

“How very sad that the greed of Citizens Energy apparently extends beyond their executives and into their self-perpetuating board,” said Kerwin Olson, executive director of Citizens Action Coalition, a consumer advocacy organization. “Clearly, the problem is institutional.” How true that statement is. As Cook's story notes, the nonprofit trust was established by city leaders like Eli Lilly and Benjamin Harrison to avoid the two evils of profiteering by monopolies and the political patronage systems associated with municipally-run utilities. These people have completely turned the plan envisioned by those great individuals on its head in a sad and pathetic effort to line their own pockets at our expense.

I hope Tony Cook looks into how much of our money these self-dealing individuals are wasting on Colts and Pacers suites, along with a boatload of tickets to the sporting events they pass out to each other and their cronies.

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