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Hm. I think this is an interesting perspective. I don't really agree with the perspective of the original poster, but it seems that a lot of what someone brings to this discussion is going to be based on specific criteria. I will point out up front that I'm not connected to SRP in any way.
Let's start with some facts.
The article talks about 77 executives whose children received educational benefits over a 5-year period. The advocates are saying it cost $2.6 million total over those 5 years; let's say it's about $520,000 per year.
The compensation is capped at the cost of attendance at an Arizona public university, so it's not as though the executives are forcing the people to pay for a super-expensive education.
The proposed SRP increase is $110 million per year.
However, employee benefits are decoupled from the SRP increase. SRP claims that the increase is paying for a $1 billion natural gas generation facility. Is that reasonable or not? I don't know. However, the increase is not paying for the educational benefits - those would be paid no matter what (just as they already have been paid).
Or if you insist on claiming that the rate increase is paying for this particular perk (as I mentioned, that's not actually borne out by the facts), this educational perk would represent only about .5% of the increase ($520,000 out of $110 million). So instead of a 3.9% increase, SRP would be proposing a 3.4% increase.
Or just use straight numbers. Someone paying $300 a month would be paying $311.70 with the increase. If you accept the claim that this benefit is paid for by the increase, and this benefit was eliminated, that person would be paying $310.20. What will YOU do with your buck and a half?
And don't claim that isn't not the magnitude - the activists here are RELYING on people worrying about the magnitude when they talk about "millions" that turn out to be $2.6 million over 5 years, and turn it into a class warfare issue with those fat-cat executives and their perks, when we're talking about 77 executives who are limited to $10,000 in benefits per child per year.
At the same time, ask yourself why executives should be shut out of the educational reimbursements that SRP gives ALL of its employees. Presumably, the executives wouldn't be using educational benefits, so passing those along to their kids seems fairly reasonable.
And making the claim that they have different standards because they're a non-profit? That's opening up a whole honking can of worms, isn't it? Do we really want to start doing exhaustive oversight of every non-profit in Arizona to find out what benefits they give their executives?
See, I'd be a lot more interested in activism if someone said there was massive malfeasance, or SRP's rates were 30% higher than the standard utility rates in the southwest region, or SRP rates are being used to pay for those 77 executives to be flown to 3-month parties in Aruba. When someone starts conflating executive perks with lining their pockets on the back of the working people of Arizona, my eyes roll up in my head. Executives get benefits. Employees get benefits. People get benefits. What on earth makes one benefit ruinous and oppressive, and another acceptable? Apparently it's whether one is receiving the benefit or not.
The objective should be to make the case that SRP isn't doing the right thing with public money. Stick with that story.
SRP is a public non-profit, with elected board members. If people are really upset about this sort of thing, how about you make your case as objectively as possible, and see whether enough people agree that something needs to change? When people make an artificially inflammatory case, it shouldn't be surprising when people don't leap to put out the fire.
This is a very well written response, and I can say you partially convinced me. It is easy to get caught up in the media hype. As a solar customer, my increase will be close to $600 a year. A switch to APS would greatly lessen this increase, however we do not have a choice in who services our utilities. I see this as one example of how public money is not being spent in the best interest of the public, it leads you to believe there may be more out there.
The big issue for utilities is the Coal plants and the EPA. SRP Navajo power plant is an older coal plant with little emmision control's they have to look somewhere else for a future. The EPA is coming down hard on coal plants with Natural gas being so low cost your going to see a big shift from Coal to natural gas. Why spend millions on a coal plant upgrading it when you can spend far less and burn cleaner natural gas as long as the price stays low that's the problem how knows how long it will stay low. Coal prices are usually contracted for 20 years so it's a good steady long term deal.
I don't know what the employee benefit is. If you would care to share, that might be helpful.
However, I'm suggesting that it is a parallel benefit that happens to represent more money at the executive level. Obviously I feel that it's a little overstated to go after a fairly small perk. Executives get benefits. If we want those benefits, we should work to become executives.
In the same way, a 401k benefit program that matches 3% of pay would match more pay for people making more money. If Sue the executive makes $100k, she will get $3k per year. If Joe the welder makes $50k, he will get $1,500. OMG, the executive is already flush with that fat paycheck, and now she gets DOUBLE the 401k benefit? And for those 77 execs, it adds up to MILLIONS for retirement. Someone call the Arizona Republic, stat!
That's why I believe this is really about activists trying to make it all about rich vs poor and workers vs management.
I disagree wholeheartedly - This isn't a "free market" situation, the customer has no choice about providers, and this provider is guaranteed a 10% profit (no matter how poorly they control costs).
Further, there is no precedent in the "free market" for an employer paying it's executive employee's children's tuition. Wanna run down a list of the Fortune 500 companies, and see how many pay for this benefit?
If Mr John Capitalist wants to create a benefit for himself, or his employees out of nowhere, they're free to do so - it's his company. When we're talking "non-profits" with a captive audience of customers and a guaranteed profit (costs be damned), then we have a problem. The regulating authority & boards for these consumer utilities have shown themselves to be quite good at rubber-stamping whatever the companies propose.
Shedding light on irrational giveaways by monopolies is as far from "class warfare" as you can get - it's appropriate to shine a lil' sunshine on the roaches when they get too bold. If they're "doing the right thing", the executives shouldn't care about the attention.
This is a very well written response, and I can say you partially convinced me. It is easy to get caught up in the media hype. As a solar customer, my increase will be close to $600 a year. A switch to APS would greatly lessen this increase, however we do not have a choice in who services our utilities. I see this as one example of how public money is not being spent in the best interest of the public, it leads you to believe there may be more out there.
Thanks! People who don't like executive perks have a reasonable gripe. It's just that in my opinion, it's impossible to make gross generalizations. Each of them has a set of circumstances.
Also, I wouldn't focus too much on someone making $x and being loaded, without knowing each person's set of circumstances. We don't normally begrudge doctors their compensation, because it takes a lot of work and study to become a doctor, because their work serves the public good, and other factors. Executives, whether corporate, non-profit, or public, also need a combination of experience and education to hold those roles, so they deserve to make whatever money the market will offer them.
Again, I realize this is a minority opinion here, but I think they also deserve whatever perks represent a compelling reason to come to Arizona, or stay in Arizona.
Then again, I have a really strong aversion to individual malfeasance or misfeasance by public employees. If these executives were caught doing something illegal or unethical, I'd be calling for their immediate removal.
I think the solar customers also have a reasonable gripe. However, that's a very different (and very contentious) issue. I haven't seen anything that I consider reasonably unbiased about it. I don't know whether $50 a month represents a reasonable charge for grid-connected solar service. This is where the fact of public directors becomes a factor. They should be required to present an accounting of the reason for the $50 a month charge (it strikes me as rather arbitrary - why not $45? why not $55?).
If they have a requirement that they earn no more than 10% profit (I think someone else posted that?), their books should be public, so we should be able to audit that fee and identify whether it's justified.
I disagree wholeheartedly - This isn't a "free market" situation, the customer has no choice about providers, and this provider is guaranteed a 10% profit (no matter how poorly they control costs).
Further, there is no precedent in the "free market" for an employer paying it's executive employee's children's tuition. Wanna run down a list of the Fortune 500 companies, and see how many pay for this benefit?
If Mr John Capitalist wants to create a benefit for himself, or his employees out of nowhere, they're free to do so - it's his company. When we're talking "non-profits" with a captive audience of customers and a guaranteed profit (costs be damned), then we have a problem. The regulating authority & boards for these consumer utilities have shown themselves to be quite good at rubber-stamping whatever the companies propose.
Shedding light on irrational giveaways by monopolies is as far from "class warfare" as you can get - it's appropriate to shine a lil' sunshine on the roaches when they get too bold. If they're "doing the right thing", the executives shouldn't care about the attention.
Well, it kind of IS a free market, but a free market for labor, and it seems implausible that there is "no precedent" for family education as part of executive compensation. When considering the vast amount of companies and private executive compensation agreements, I'd be shocked if they DIDN'T include that in certain regions.
In the same way, superstar athletes get perks and benefits that other athletes don't get. Tiger Woods probably gets paid just to show up at golf events. Does that represent some kind of unethical or unreasonable payment?
If you want to get really riled up, take a look at the IRS page on Executive fringe benefits. :-) Executive Compensation - Fringe Benefits Audit Techniques Guide (02-2005) I bet you never even CONSIDERED whether SRP was paying for, say, the families of executives to, say, accompany them on business trips.
Oops, but now I've prompted another outlandish article, "Junk Junkets: Fat-Cat Executives and their Flying Families Cost Taxpayers Millions!"
Another poster indicated that SRP employees have a $5,500 annual education benefit. Giving executives a larger benefit and allowing them to apply it to their families seems like a valuable benefit that would help SRP attract high-quality executives.
The Arizona Republic published an article crowded with sensationalistic claims. It is an attack piece, written with a specific rhetorical objective, and you're buying it. I'm choosing a much more moderate approach to the discussion, and I'm not buying it. That's okay.
Sure, employees may get a scrap of the "tuition reimbursement" benefit too, but like most companies, the difference is that it probably only counts for stuff that a paricular company finds relevant to their own interests, and even then, you may have to write a huge essay giving a justification of why; and for each class. "Why is business management relevant to a retail company?" Hmmm, I don't know. "Why are linear algebra and algorithm development relevant to software engineering?" Hmmmm, no idea, let me think. The execs kids could major in basket weaving and it'd be ok (setting aside that this benefit isn't even for the employee itself, but their kids).
Sure, employees may get a scrap of the "tuition reimbursement" benefit too, but like most companies, the difference is that it probably only counts for stuff that a paricular company finds relevant to their own interests, and even then, you may have to write a huge essay giving a justification of why; and for each class. "Why is business management relevant to a retail company?" Hmmm, I don't know. "Why are linear algebra and algorithm development relevant to software engineering?" Hmmmm, no idea, let me think. The execs kids could major in basket weaving and it'd be ok (setting aside that this benefit isn't even for the employee itself, but their kids).
But that sidesteps the argument here. If you think of anything in isolation, it is ridiculous and unreasonable. If you use a rhetoric of blame or accusation, you will always overstate the case.
Ask employees if they would do without the "scrap" of reimbursement. That reimbursement is the way they could eventually move up to become an executive and have people like you attack them. SRP and these executives are being bad-mouthed and hated for nothing more than offering benefits and using benefits.
Everyone wants to be the King or Queen. It's a pretty good gig. However, it takes a set of circumstances to qualify. Executives have accomplished that set of circumstances. Non-executive employees are equally valuable as people, and no enterprise could perform without them, but they are striving to improve so they can achieve the same success.
This is an eternal philosophy. No matter what graduate degree I achieve, or however hard I work, or whatever experience I earn, someone out there will say I'm just a lucky jerk and don't deserve what I have. I'm nowhere near executive ranks, but I don't envy them anything.
Or rather, I'm a capitalist. When I see something anyone else has that I would like, I know that I have the ability to get it myself, so I do that. I strive to improve and achieve for myself, rather than strive to drag down the people who have already achieved.
First of all, I don't believe for a second that being the executive of a large company requires any measurable amount of talent. A small one, absolutely hell yes. The kind where you're balls-to-the-wall everyday and go gray in 5 years. But large ones run themselves. You can put anyone into that position when all it involves is reading the reports and charts that hard working interns and hourly workers spent days or weeks working on; then spending a few minutes to read it and make the obvious choice that is clearly spelled out. The case of it needing hard work and talent isn't helped at all when one executive takes on half a dozen roles (obviously they're not 5-6 full time positions). Getting into that position is who you know, not what you know.
Having perks such as zillions of stock options, a free tropical vacation each year, a company car, etc., ok. Still not a fan, but whatever. But I just think that free education all around for the entire family is really f-ed up given the state of the education ecosystem the last 15 years and where it's sadly heading for the foreseeable future.
First of all, I don't believe for a second that being the executive of a large company requires any measurable amount of talent.
That says more about you than about them. You've read too many Dilbert cartoons, watched too many episodes of The Office. You lose me the moment you turn a human being into a cartoon. Stereotypes aren't only offensive when they target people because of their ethnicity or social status.
Quote:
Originally Posted by PhoenixSomeday
Getting into that position is who you know, not what you know.
That's too categorical to be true, although it's ridiculous on its face. When he was the CEO of Apple, I met Steve Jobs personally. I've interacted with executives in dozens of roles. I can say for certain that many executives have talent: some have extraordinary talents. They're people, though, and some are also jerks, or distracted, or struggling in various ways.
I've also served in a regimental headquarters when I was in the Marines. Your observation is quite a lot like the typical enlisted service member's grousing about how officers don't know anything. Some do, some don't, some don't have the time to help the rest of the team catch up.
Again, if someone's not competent to serve in a particular role, that's an issue with the board of directors who selected them.
Let's think about your threshold here. Can you think of any promoted position where "who you know" isn't true? In literally any area? Getting promoted to team lead in a software development group. Getting promoted to supervisor at a taxi company. Getting promoted to lead bottle washer at the Coke plant?
Quote:
Originally Posted by PhoenixSomeday
Having perks such as zillions of stock options, a free tropical vacation each year, a company car, etc., ok. Still not a fan, but whatever. But I just think that free education all around for the entire family is really f-ed up given the state of the education ecosystem the last 15 years and where it's sadly heading for the foreseeable future.
You're okay with them getting zillions of stock options, but upset about them getting a taxable educational benefit for their children? SRP doesn't have stock options, so they can't offer that as a perk. Instead, they offer simple things, you know, like up to $10k a year to offset the cost of kids in college.
Not even sure how you imagine that it's a free education, but go figure. You know that the benefit is capped at $10k per year. Have you looked at college costs lately? And the executives aren't abusing the privilege. The average cost to SRP for this perk is $6,753 per executive per year. ($2.6 million / 77 execs / 5 years) In my opinion, that's a much better choice than just building it into their salaries.
100% true, it is these executives that decided to raise the rates, they are complaining the solar (they were pushing a few years ago) is cutting into their profit. If it were a private company, cutting back would happen before raising rates.
So when did a private company last cut executive compensation? In the real world the only salaries that are rising significantly are c-suite ones. The only salaries that get cut are yours and mine.
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