We’ve talked in this blog before about Avista being an investor-owned company. Because we are publicly owned by our shareholders, we have reporting requirements, which we meet each year. These reports are available to the public
, and we believe they are a good way for people to gain a better understanding of how we do business.
At the end of February we filed our annual report
and today we filed our proxy statement
with the Securities and Exchange Commission. This is a great opportunity for shareholders and the public to read about how our company performed in 2009. The annual report takes an in-depth look at the financial operations of Avista Corp. and talks about the issues that may impact or are impacting our company.
The proxy statement provides information for shareholders who will vote on issues at the company’s upcoming annual meeting. There is a complete description of how the company is governed by the Board of Directors, their roles and responsibilities and information about directors who are nominated for election.
The proxy also contains in-depth information about executive compensation at Avista. Given the stories in the national news over the past couple of years, there is more and more attention to executive compensation. Some of our customers think that one of the reasons we request a rate increase is to pay the salaries of our executives. That’s not the case. You may or may not agree, so I hope you’ll read on to learn more about salaries and your bill.
The first thing to know is that all employee salaries, including executives, are targeted to be in the middle of the range for similar jobs at similar companies in our region. We review what’s happening in the market regularly. Salaries and incentives are reviewed by the state utility commissions each time we ask for a change to rates, and they determine what is reasonable to include when rates are set.
Less than one-half cent of each dollar in your energy bill goes to pay for the salaries and incentives for all of our officers. That’s less than 75 cents on a monthly bill of $150. Any remainder is paid by shareholders.
Okay, what’s driving the rest of the compensation you see for executives? A part of their compensation is based solely on achieving the targets set for the company’s performance. This means that a part of their compensation is at risk and not guaranteed to be paid. In other words, if we don’t meet goals for customer satisfaction, service reliability and overhead costs, that part of their compensation isn’t paid. Not all industries or all companies set these kinds of targets, but we do and we have for many years.
Some of what is included in the Total Compensation chart in the proxy is a change in the value of the top five executives’ pension – it’s not money they’re taking home – it’s a change in value of their future pension based on length of service with the company, age and other factors. And I want to assure you that Avista doesn’t give perquisites (perks) – no personal private club memberships or discounts on energy bills or cars or boats or vacation homes.
I hope I’ve been able to give you a little more information about our company than you had before you read this post. If you’re interested in more information about executive compensation or how our company runs or our annual report
and proxy statement
, you can read more here or contact us at firstname.lastname@example.org
. We’ll do our best to give you the information you request as quickly as possible.