Promoting Fiscal Responsibility in Compensation Practices at the Tennessee Valley Authority
MEMORANDUM FOR THE BOARD OF DIRECTORS OF THE TENNESSEE VALLEY AUTHORITY
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MEMORANDUM FOR THE BOARD OF DIRECTORS OF THE TENNESSEE VALLEY AUTHORITY
SUBJECT: Promoting Fiscal Responsibility in Compensation Practices at the Tennessee Valley Authority
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Tennessee Valley Authority Act of 1933, as amended (16 U.S.C. 831 et seq.), I hereby direct:
Section 1. Policy and Purpose. The Tennessee Valley Authority (TVA) is a wholly owned corporate agency and instrumentality of the United States that operates for the public benefit. As a federally owned entity, the TVA is entrusted with stewarding public resources in a manner consistent with principles of fiscal responsibility, accountability, and public service. Excessive compensation at federally owned corporations undermines public confidence and is inconsistent with responsible stewardship of Federal resources. The President of the United States — the chief executive officer of the entire Federal Government — is paid a salary of $400,000. The highest paid governor in the United States — the chief executive officer of an entire State — is paid approximately $254,000 per year. Yet senior executives at the TVA have received compensation in the millions of dollars for their ostensibly public service. To ensure fiscal responsibility and alignment with public sector standards, it is necessary to impose reasonable limits on compensation at the TVA.
Sec. 2. Compensation Limits. (a) In conducting its annual survey of prevailing compensation, the Board of Directors of the TVA (the “Board”) shall place greater weight on the compensation of Federal, State, and local government officials. The Board shall, as appropriate and if consistent with its annual survey, adopt and implement policies establishing a maximum total annual compensation limit of $500,000 for all TVA employees, including the Chief Executive Officer.
(b) For purposes of this memorandum, “total annual compensation” includes salary or any other pay, bonuses, incentives, and any other form of current or future financial compensation provided by the TVA to the relevant employee.