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ERCOT Seeks To Nearly Double Compensation For "Selected Director" Board Members
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ERCOT filed at the Texas PUC to increase the compensation for the "Selected Director" members of its board of directors
A Selected Director, as defined in the Bylaws, is a Director who is selected in accordance
with PURA § 39.1513 -- i.e., a Director selected by the ERCOT board selection committee that
must meet the eligibility requirements of PURA §§ 39.151(g)-(g-4), including the absence of a
fiduciary duty or assets in the electricity market for the ERCOT region.
ERCOT's Selected Director compensation proposal is as follows, to be effective July 1, 2023 (all amounts are annual):
ERCOT stated that a consultant retained by ERCOT performed a benchmarking analysis, "using multiple data
sources and market perspectives, including other Independent System Operators (ISOs),
comparably-sized general industry companies, ERCOT Market Participants, and public companies
with which ERCOT’s Directors are affiliated."
"Based on this benchmarking analysis and other
considerations including the high volume and complexity of work, recruitment considerations, and
external optics and standards," ERCOT proposed the amounts listed above
ERCOT stated that compensation levels for Directors entitled to be paid for service (at the time, "Independent
Directors") were last changed by the Board at its meeting on July 17, 2012. Compensation levels
have remained unchanged for almost 11 years, ERCOT said
ERCOT's consultant stated in a presentation that, "Current average annual compensation for ERCOT’s directors falls below the 25th percentile values
of both the ISO peers and the General Industry comparator group, and well below the Market
Participant and Affiliated Company comparator groups".
ERCOT's consultant stated in a presentation that, "Current Total Board Cost (including Board leadership roles) is similarly positioned relative to the
ISO peers and other market references".
Concerning the proposed compensation levels, ERCOT's consultant stated in a presentation the following concerning the proposed new levels:
• "Average annual compensation per
director would be positioned 3% above
the 75th percentile among the ISO peers"
• "Retainers for Board and Committee
leadership roles would be aligned with
market levels"
• "Total Board Cost would be positioned 9%
below the 75th percentile among the ISO
peers (and 4% below the median)"
Docket 54444
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June 21, 2023
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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
Component Current Proposed
Selected Director Base Compensation $87,000 $160,000
Board Chair (added compensation) $12,800 $35,000
Board Vice Chair (added) $7,500 $15,000
Board Committee Chair (added) $5,600 $25,000
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