Energy costs are high. So are the earnings of top executives that run these companies

Monitor staff
Published: 9/24/2022 4:01:06 PM

Electricity bills are expected to go through the roof this winter. Power companies, like Eversource and Unitil, have warned users that service rates will double. State and federal governments have issued assistance programs to alleviate costs.

While rising bills will be the cause of financial stress for many New Hampshire residents who are struggling to make a living wage, corporate leaders at New England’s largest energy providers often earn seven-figure salaries – with stock ownership and performance-based add-ons to bolster their earnings.

In 2021, Joseph Nolan, the president and CEO of Eversource, earned $4.7 million. With a base salary of $1,004,424, Nolan received an additional $1.4 million from stock awards and $2.25 million in incentive earnings.

James Judge, the Eversource executive chairman, made $10.2 million last year – with a base salary of $1.1 million and compensation earnings of $2.2 million. The majority of his pay comes from his stock awards. Judge, who is set to retire at the end of the year, owns over 100,000 shares in the company. His stock awards generated $6.8 million in 2021.

Meanwhile, the total compensation for Unitil CEO Thomas Meissner was about $2.4 million last year, while his retirement account has a value of about $7 million, according to company documents.

These numbers for executive pay come from utility companies that tell ratepayers they do not make a profit. However, electricity rates and executive compensation aren’t linked by a cause-and-effect relationship.

Executive salaries – which are established by a compensation committee – are approved at the annual shareholder meeting.

The compensation committee reviews performance-based compensation and policy and analyzes market data, like the pay of other executives at comparable companies, to determine rates. Their pay doesn’t go up or down based on the cost of electricity to consumers.

“Our compensation strategy is performance-driven and market-based, and we use an independent, third-party compensation firm to help shape our compensation packages to ensure that they are in line with the market,” said William Hinkle, spokesman for Eversource. “Executive packages are a combination of base salary, annual cash incentive awards and long-term, equity-based incentives.”

Hinkle said Eversource tries to keep its controllable costs as low as possible for its customers.

Donald Kreis, the state consumer advocate, says decisions about compensation are at the hands of the company and its shareholders – without supervision or regulation from the New Hampshire Public Utilities Commission, or any other government authority.

Electricity rates, on the other hand, are driven by wholesale power suppliers that bid to provide energy to customers.

Two factors are to blame for the significant rate increase.

The first is the cost at which wholesale power suppliers are willing to sell to utility companies. To determine the rate price for each period, Eversource and Unitil request bids to supply energy for the period.

The second factor is the state’s dependency on natural gas, said Kreis.

“We are overreliant in New England on natural gas to produce our electricity. When it gets cold in the winter, it is very difficult to get all the natural gas we need into New England,” he said. “So when fuel becomes scarce, it drives up wholesale prices.”

With the combination of a dependency on natural gas and external energy conglomerates setting price points, Eversource warned customers of up to a 60% increase in their upcoming energy bills. In their notice of the rate increase, they also stated that they do not earn a profit on the cost of electricity.

Without the need to make state executives’ salaries public, Eversource declined to provide the earnings of Doug Foley, the president of New Hampshire operations.

Soon Eversource will ask for bids again to determine the rate for the next period. If Kreis could predict costs, he hopes consumers will see a lower rate.

“I can’t guarantee it, but I think the rate for the next six months will be somewhat lower. The spring and summer are usually cheaper,” he said. “But it will still be cold in February and March and part of April, and those will be expensive months.”


Michaela Towfighi is a Report for America corps member covering the Two New Hampshires for the Monitor. She graduated from Duke University with a degree in public policy and journalism and media studies in 2022. At Duke she covered education, COVID-19, the 2020 election and helped edit stories about the Durham County Courthouse for The 9th Street Journal and the triangle area's alt-weekly Indy Week. Her story about a family grappling with a delayed trial for a fatal car accident in Concord won first place in Duke’s Melcher Family Award for Excellence in Journalism. Towfighi is an American expat who calls London, England, home despite being born in Boston.

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