SCANA execs paid millions of dollars leading up to massive nuclear failure
The Cayce-based utility has paid its top officials almost $21.4 million in annual performance-based bonuses over the past decade, according to The State newspaper’s review of the utility’s filings with the U.S. Securities and Exchange Commission.
Some of those payouts were to reward the executives for accomplishments related to the construction of two nuclear reactors at the V.C. Summer site in Fairfield County, SCANA said in the filings.
Late last month, SCANA and the state-owned Santee Cooper utility said they were abandoning that project, citing construction delays and cost overruns that plagued the 9-year-old venture.
A SCANA spokesperson told The State on Wednesday that the utility does not comment on its employees’ pay.
However, lawmakers are questioning the payments.
“Knowing everything we know now, and knowing that we have a project that has been abandoned, those are pretty staggering numbers,” said state Rep. Russell Ott, D-Calhoun, recently appointed to an S.C. House panel that will investigate the nuclear bungle. “If everything was going so well that you were willing to give your executives bonuses because of it, then what all of a sudden went so badly?
“Those are going to be questions that SCANA has to answer.”
State Rep. Kirkman Finlay, who is on the same panel, said the bonuses left him nauseated.
“This a $9 billion failure,” the Richland Republican said. “The idea that bonuses were paid for a failure of this magnitude is appalling, disturbing and galling.”
Last year, SCANA’s top five executives took home $3.3 million in performance-based pay, according to the federal filings. Nearly half of that went to SCANA chief executive officer and president Kevin Marsh, accounting for about a quarter of his $6.1 million in total compensation.
The filings do not say exactly how much of the $21.4 million in performance-based pay went to reward the executives for building the two nuclear reactors.
For most of the past decade, roughly half of SCANA executives’ performance-based pay was tied to the company meeting its profit goals, according to the utility’s Securities and Exchange Commission filings.
The rest was paid to reward executives for meeting individual and department goals – including, for some officials, construction milestones at V.C. Summer.
The filings said Marsh’s $1.4 million performance-based bonus for 2016 was paid in part because of his “oversight and support of our nuclear construction activities.”
SCANA chief financial officer Jimmy Addison was paid an extra $620,000 last year in part for his “efforts to secure financing related to our new nuclear construction project,” the filings say.
SCANA executive vice president Stephen Byrne received the same amount for “his continuing oversight of various aspect of our new nuclear construction activities,” among other nuclear-related efforts listed in the filings.
The utility’s leaders also sometimes received separate discretionary bonuses tied to the project.
In 2014, for example, SCANA’s top executives received an added bonus, equal to 20 percent of their performance-based pay. Among the reasons for that award, according to SCANA’s filings: “We continued to achieve operational excellence while pursuing our new nuclear construction project and controlling our operations and maintenance expenses.”
Earlier, in 2012, Byrne received a $183,750 bonus for his “efforts and achievements associated with our new nuclear construction project,” according to the filings. Byrne’s “extraordinary project management for our new nuclear construction project has been instrumental in moving the project forward,” SCANA said in the filings.
SCANA spokesperson Rhonda O’Banion told The State the utility does not comment on its employees’ pay. “We are pursuing our plan to wind down the (Fairfield) site and stabilize the property while we continue to focus on our mission of providing reliable energy to the people of South Carolina.”
‘Only decent thing to do’
Some S.C. lawmakers were incensed to hear about the bonuses, citing the $1.4 billion that SCE&G power customers already have paid in rate hikes to cover the cost of the reactors.
“What they should be doing is deciding how they’re going to refund their customers’ money,” said state Rep. James Smith, D-Richland, who recently formed an “Energy Caucus” of legislators intent on studying the V.C. Summer boondoggle and recommending changes. “That’s the only decent thing to do.”
State Sen. Vincent Sheheen, D-Kershaw, said SCANA has failed its ratepayers while looking out for itself and stockholders. “The ratepayers have not been well served over the last five or 10 years.”
In its federal filings, SCANA said its annual incentives “promote our pay-for-performance philosophy, as well as our goal of having a meaningful amount of pay at-risk.” That pay structure helps recruit and retain top talent, the utility said.
The utility’s top executives almost always met their pay-for-performance goals and received payouts, according to the filings.
The pay-for-performance plan applied to senior executives and more than 200 other SCANA employees, including senior managers and division heads. Any V.C. Summer-related bonuses for those employees were not included in the filings.
The overall pay of SCANA’s top five executives increased to $14 million in 2016 from $8.5 million in 2007, the year the S.C. Legislature passed a law that allowed the utility to bill customers for the cost of the reactors while they were under construction.
Pay for play
Top SCANA executives have been paid nearly $21.4 million in performance-based bonuses over the past decade. Some of that money was to reward the officials for their accomplishments in building two nuclear reactors in Fairfield County, a project the utility now says it will abandon. Here is how much the executives were paid each year.
Additional discretionary bonuses
SOURCE: SCANA filings with the U.S. Securities and Exchange Commission