The CEOs of America's top 51 utilities received an average raise of $12.3 million last year, a 16% increase in compensation, while their customers faced electricity bills that climbed as much as 40% since 2021, according to a new analysis.
Thirty-eight of the 51 executives received pay increases totaling $82 million collectively. Bill Ferhman, CEO of American Electric Power, saw his compensation spike by $23 million—a 176% increase—despite his company cutting off service to 173,000 customers.
Meanwhile, consumers are getting disconnected 13 million times annually, the analysis found.
Utilities justify executive pay by saying it drives shareholder returns and attracts top talent. ConEd said its CEO compensation aligns leadership with customer interests, while Southern Company claimed its pay structure ensures reliable energy.
However, companies are slashing incentives tied to customer service while expanding bonuses tied to profit margins, the analysis showed.
Utilities operate as regulated monopolies, meaning customers have no choice but to pay or lose service. State regulatory commissions, often staffed by industry-friendly appointees, rarely push back strongly enough, according to the review.
Since 2017, CEO compensation at these firms has grown 47%—far outpacing inflation and worker wages. Customers have collectively footed over $5 billion of that increase.
In Michigan, customers of DTE Energy are paying for raises for both an outgoing CEO and his replacement.
Without accountability, utilities have little incentive to balance executive compensation against customer welfare, the analysis concluded. The system has optimized for shareholder profits while deprioritizing service reliability and affordability.
