Ameren top execs get bonus in spite of missing profit goals

~ Events outside of the company's control are typically not counted in calculating executive pay.

ST. LOUIS -- Ameren Corp. didn't meet its own profit goals last year and suffered two power outages that left more than 1.5 million customers without electricity for days at a time.

But top executives still pulled down $762,000 in cash performance bonuses.

The St. Louis Post-Dispatch reported Friday that Ameren's board of directors shuffled the numbers so top executives could get the bonuses, even though they were not initially entitled to them under the company's compensation plan.

At the same time, rank-and-file workers who spent days restoring power during the outages did not get any bonuses because the company missed its profit goals.

Spokeswoman Karen Foss told the newspaper that while unionized line workers did not get a bonus, they did get overtime pay during the outages while executives did not.

"Incentive pay is viewed as part of the total pay of management employees," Foss wrote in an e-mail.

Ameren executives were supposed to get a year-end cash bonus if the company reported profits of at least $2.95 a share. Instead, the firm reported profits of just $2.66 a share.

But during a meeting in February, the Human Resources Committee of Ameren's board decided to change the standard to "reflect the exceptional effects of extraordinary weather events and regulatory rulings," according to Ameren's proxy statement, a document filed annually that reports a variety of corporate data.

'Extraordinary' expenses

The committee decided to strip out "extraordinary" expenses of $53 million related to the storms, and another $15 million in low-income assistance for Illinois. Without those costs, the company hit the minimum profit threshold last year to trigger the cash bonuses.

Chief executive Gary L. Rainwater received a cash bonus of $243,000 and chief financial officer Warner L. Baxter received $180,000. Three other executives also received bonuses greater than $100,000.

Ameren spokeswoman Susan Gallagher said it's not unusual for the board committee to adjust for items that aren't in the company's budget, such as the cost of storms and expenses that are the outcome of regulatory rulings.

"It is normal for them to back out extraordinary items," she said.

The compensation committee also took into consideration an award given Ameren by the Edison Electric Institute, a utility trade group, for efforts made to restore power after the storms, as well as improved performance at power plants.

Ameren's compensation committee is a group of five outside directors that determines executive pay.

Compensation committees generally have a lot of latitude to decide what costs are included when calculating executive pay, said Nora McCord of Steven Hall & Partners, an executive pay consulting firm in New York.

Typically, events that are outside of a company's control aren't counted for those purposes, she said.

Ameren officials were on the witness stand in Jefferson City this week to defend a proposed $360 million annual increase in rates.

At a Missouri Senate hearing Thursday in Jefferson City, Sen. Tim Green, D-Spanish Lake, asked Ameren Chief Executive Thomas Voss, who got $100,000 in incentive pay, why union workers for the utility received no bonus while senior executives did.

Voss said employees were rewarded for their work during the storms in the form of overtime pay. Some workers were "virtually on double pay," he said. The executives, by contrast, put in long hours with no extra compensation.

"Some people in this room worked many long hours, and didn't get paid anything for it," Voss said, referring to other Ameren officials in the room.