Poaching Talent: Private utility salaries off the charts

Carl Mycoff estimates that executives at investor-owned utilities and utilities owned by private equity firms make, on average, about six times more than public-power officials.

In 1974, Mycoff founded Conifer, Co.-based Mycoff & Associates, an executive recruiting firm specializing in utilities.

Mycoff is familiar with CU, having assisted CU in 2005 in filling its associate general manager of operations position. Wade Stinson was hired for that role, and Mycoff was paid $49,793 for his help.

“John Twitty and that whole staff is an excellent group of people,” said Mycoff, warning against CU skimping on executive salaries. Mycoff argues that private-power companies can swoop in and cherry-pick the best talent from public power, enticing them with bigger paychecks.

Bill Fehrman was once a talented public-power executive, Mycoff noted. Now, Fehrman is a talented private-power executive, and Mycoff guesses that Fehrman’s cashing in with a salary of about $2 million a year.

In 2006, Fehrman left his post as president and CEO of Columbus, Neb.-based Nebraska Public Power District to work for Des Moines, Iowa-based MidAmerican Energy Holdings Co., a privately owned energy giant with majority ownership by Warren Buffett’s Berkshire Hathaway Inc. Fehrman is now president of MidAmerican Energy, which has more than 714,000 electric customers and more than 696,000 natural gas customers, according to its Web site.

Twitty said members of his executive staff are approached from time to time about opportunities in private power.

“We like to think there’s a lot of advantages to working at City Utilities, and compensation being at least in the range of the market is really important as part of that package. But I wouldn’t be surprised any day to have any members of the senior management team come in and say, ‘Hey, I’ve had this kind of an offer,’” Twitty said. “In some cases, people do take those opportunities.”

Salaries are higher right next door, in fact.

William Gipson is president and CEO of Joplin-based Empire District Electric Co. (NYSE: EDE), an investor-owned utility with 215,000 customers. Empire offers electric, water and natural gas services in Missouri, Kansas, Oklahoma and Arkansas.

Gipson made $300,000 last year, not counting stock awards and other incentives, which pumped his total compensation package up to $759,906, according to a Securities and Exchange Commission filing.[[In-content Ad]]