As FPL Group's CEO was nearing a merger deal last week, Lewis Hay III and other top Florida Power & Light executives got pay raises for 2006.
Hay, the chief executive, who announced the deal to merge with Baltimore-based Constellation Energy this week, will get $1.15 million in annual base salary in 2006, according to a filing yesterday with the Securities and Exchange Commission. That's up from $1 million this year.
Hay's base salary, as well as that of Florida Power & Light President Armando Olivera, is approved by FPL's compensation committee based on performance measures. Those measures include restoration after a hurricane and "service reliability," according to the filing.
Olivera's 2006 base salary was boosted from $477,000 to $551,221 for next year.
Some Florida Power & Light customers were still without power two weeks after Hurricane Wilma hit Oct. 23. But Mayco Villafana, spokesman for the utility, said hurricane-related power outages are not counted in the reliability numbers.
"We are the best when you look at all the utilities in Florida, the best reliability when it comes to average outage for customers. On reliability we have improved under the leadership of Armando Olivera," Villafana said.
FPL customers were out of service an average of 69.7 minutes during the year, excluding hurricanes, the lowest of all investor-owned electric utilities in Florida and about half the national average of 137.8 minutes, he added.
Storm restoration also has improved, Villafana said. "At least 75 percent of the customers [after Wilma] were restored in three days."
Hay's total compensation in 2004 was $2.4 million, including bonuses, stock options and long-term compensation based on performance. It's unclear how much more Hay will receive in long-term compensation or other bonuses if the merger is completed.
"Lew's compensation is an issue determined by the board," said Steve Stengel, a spokesman for FPL Group.
The compensation committee determines an executive's pay from information drawn from "utility and general industry surveys, proxy statements and independent consultants," the SEC filing says.
Hay said this week that FPL executives have agreed not to take "change-of-control" payouts for the Constellation Energy merger. Former FPL executives collected $62 million in payouts after an earlier merger bid for Entergy Corp., even though that deal fell through.
An annual bonus for the top executives also may be in the offing.
Marcia Heroux Pounds writes for the South Florida Sun-Sentinel.