Advertisement

Allegheny pays exec $562,500 incentive

November 25, 2002|by LAURA ERNDE

laurae@herald-mail.com

Allegheny Energy's Chief Executive Officer Alan J. Noia is getting a $562,500 performance bonus this year even as the Hagerstown-based utility is experiencing financial troubles.

Noia earned the incentive award for meeting the company's 2001 performance goals, according to documents filed with the U.S. Securities and Exchange Commission.

His total compensation package for the year won't be reported to the SEC until April 2003.

In 2001, Noia earned a base salary of $700,000 and was awarded company stock that was worth $256,636 at the time.

Advertisement

Allegheny Energy declined to comment on the executive compensation package. Spokesman Allen T. Staggers said the company does not divulge salary information for any individual employee other than what is required by the SEC.

It's not uncommon for CEOs to receive large paychecks even when the company they run is not doing well, said William Trau, a partner at the executive search firm of Christian & Timber in Cleveland, Ohio.

"It doesn't help the morale of the organization when you see this," he said.

It's happening less often as more companies nationwide link their executive compensation with company performance, Trau said.

As the electric utility industry became deregulated, Allegheny took steps to tie pay to performance and plans to continue that this year.

"For 2002, a substantial portion of total compensation will continue to be linked to corporate and business performance," the SEC filing said.

A committee of Allegheny board members reviews the company's executive compensation package every year.

In 2001, a survey of comparable energy companies indicated that Allegheny's pay structure was below the median, the SEC filing said.

Allegheny is reeling from the downturn in energy trading following the collapse of Enron Corp. The company borrowed heavily to enter the arena last year, buying Merrill Lynch & Co.'s energy-trading business for $490 million. Now, it is fighting lawsuits, debt problems and declining profits.

Noia has taken responsibility for the company's financial performance, although he said in August that, "no reasonable person could have predicted" the path of the energy trading market over the past year.

Other Allegheny executives also earn hefty salaries, according to the SEC report filed in April.

Senior Vice President Michael P. Morrell, who also is president of the company's energy trading firm Allegheny Energy Supply, earned a base salary of $300,000 and company stock worth $106,761 last year. He earned an incentive award of $170,700 this year.

Senior Vice President Jay S. Pifer earned a base salary of $285,000 and company stock worth $98,548 last year. He earned an incentive award of $191,300 this year.

Vice President Richard J. Gagliardi earned a base salary of $255,000 and company stock worth $73,911 last year. He earned an incentive award of $138,400 this year.

Vice President and General Counsel Thomas K. Henderson earned a base salary of $245,000 and company stock worth $73,911 last year. He earned an incentive award of $123,500 this year.

The Herald-Mail Articles
|
|
|