HELENA – NorthWestern Energy paid more than $3 million in compensation to its top four executives last year, including $1.4 million for president and chief executive officer Bob Rowe.
Rowe, in his fourth year as president and CEO of the gas-and-electric utility with its Montana headquarters in Butte, had a 3 percent raise in base salary for 2011 and substantial stock rewards and incentive payments.
The same raise and benefits went to the company’s other top executives as well – and raises for all NorthWestern employees averaged about 3.5 percent last year, said company spokeswoman Claudia Rapkoch.
NorthWestern, which employs about 1,400 people, holds its annual shareholders meeting Wednesday in Butte. Among other things, shareholders will vote on whether to approve the company’s executive compensation plan.
The vote is non-binding, but “carries significant weight,” Rapkoch said, because the company wants to maintain a good relationship with its shareholders. Last year, shareholders overwhelmingly endorsed the executive pay plan, and this year’s plan is basically the same, she added.
The plan this year includes another 3 percent raise in base pay and various incentives and stock rewards tied closely to the company’s short- and long-range performance, Rapkoch said.
Here’s a look at what NorthWestern paid its top executives for 2011, according to its proxy statement:
n Rowe, an attorney and former state public service commissioner who joined the company in 2008, had a $511,000 base salary for 2011. He also had a $415,000 “incentive payment” and stock rewards valued initially at $475,000.
The stock, which can’t be cashed in until a later date and only if certain company performance benchmarks are met, could be worth more or less on that date.
• Chief financial officer Brian Bird had $722,000 in total compensation, including his $335,000 salary.
• Vice president and general counsel Heather Grahame’s total compensation was $576,000, including her $305,000 salary.
• Curtis Pohl, vice president for retail operations, had total compensation of $453,000, including his salary of $240,000.
The incentive payments are based on whether the company meets pre-determined goals on net income, employee safety and customer service for the year. The stock rewards are tied to longer-term company performance goals.
Most employees are eligible to earn incentive payments, ranging from 2 percent to 20 percent of their salaries, depending on their position, Rapkoch said. About 8 percent of workers also take part in the stock reward program, she added.
Top executives also are required to own a minimum level of company stock, “to discourage short-term thinking or risky behavior,” Rapkoch said. For example, Rowe is required to own stock valued at five times his annual salary.
According to the company’s proxy statement, NorthWestern’s executive pay is at or near the bottom when compared to peer utilities in the region – even though the company had overall performance better than many of these other utilities.
NorthWestern reported $92.5 million in net income for 2011, a 19 percent increase over its profits the previous year. The company will release its 2012 first quarter results on Wednesday.
The proxy statement also reported 2011 payments to NorthWestern’s board of directors.
E. Linn Draper Jr., the chairman of the board, was paid $100,000 in cash and 3,000 shares of stock, which currently is worth about $100,000. Other board members received payment ranging from $53,000 to $79,000 last year, and stock awards of 2,000 shares each.
Draper’s total holdings in the company are worth about $2.4 million, the statement said.
Missoulian State Bureau reporter Mike Dennison can be reached at 1-800-525-4920 or at firstname.lastname@example.org.