— from Alex MacLeod —
A year or so ago I reported that we OPALCO ratepayers had forked over nearly $400,000 in total compensation in 2017 to our general manager, Foster Hildreth. I wrote at the time that if his pay increased in 2018 at the same rate it had his first two years we’d be paying him as much as $440,000 in 2018.
Little did I appreciate the fiscal profligacy of our board.
Foster’s total compensation for 2018 — the last year such information must be made public — rose to almost $456,000, an increase year-over-year of a little over 14%. Over the four prior years, his compensation rose about 50%, an increase that might possibly be justified either by outstanding performance or overcoming significant business obstacles, neither of which
occurred.
Those of us who pay for this compensation might not be concerned had our electricity bills increased more in line with the cost of that electricity to our cooperative, but that hasn’t happened.
We also might be OK if Rock Island Communications, which we’ve also paid for, had been meeting its financial goals and were pumping profits back into the cooperative, as we were promised it would by now. That hasn’t happened, either. Last year we were told that would happen this year. Now we’re told it will be at least another three years before it might.
Meanwhile, the cooperative has taken on more debt, by far, than ever in its history, and continues to guarantee millions in additional, unanticipated Rock Island debt. The cost of this debt — now approaching $100 million — falls to us ratepayers, generally in the fixed charge we pay to be connected, an amount that has increased far faster than inflation.
Think about this pay — comprised in 2018 of $292,000 in salary and $163,564 toward his retirement (a figure that has increased nearly 75% since he became general manager) — in the context of OPALCO.
First, we’re a cooperative, not a for-profit business. Second, It buys power from a single source at set prices, distributes it, sets rates sufficient to pay for the power and distribution infrastructure, and its small payroll. It is not exactly rocket science. Third, OPALCO has just 50 employees, a reflection of how uncomplicated its business is.
We don’t know what Hildreth’s pay was last year or this because the board doesn’t say. It only is revealed by the Internal Revenue Service on what’s called a Form 990 about 18 months after it is filed, which is where I found it. OPALCO, which began posting Form 990s on its web site several years ago only after being asked, still hasn’t posted its 2018 filing. However, if the
pattern of Hildreth’s pay increases over the years it has been disclosed holds true — and there is no reason to believe otherwise — his total compensation this year is about $520,000.
So, here we are, paying outlandish sums for mediocre performance, made possible by a go- along board that puts Hildreth’s interests above all others. Had it been doing its job, it wouldn’t have been throwing ever more money at Hildreth. It would have been finding someone to do the job well and earn his or her pay.
(Alex MacLeod is a longtime OPALCO member who lives on Shaw Island.)
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Seriously? Thank you!
Get the facts on compensation, Rock Island and OPALCO finances:https://www.opalco.com/newsroom/quick-facts/ Hildreth’s compensation package is determined by the Board of Directors through an objective process based on performance and comparison to industry peers, although there are precious few other examples of a Co-op General Manager that is also running an internet service provider company.
Board President Vince Dauciunas commented: “Power and broadband are essential to our daily lives and economy. In my opinion, our General Manager has one of the most important jobs in the County in leading these organizations. The position requires knowledge in many areas, and the experience to make decisions necessary to keep two complex entities functioning smoothly. The Board has confidence that Mr. Hildreth is managing both organizations well, while executing on long-range plans to meet the challenges in the future.”
But look at how much money he got for the company from the stimulus! Doesn’t he deserve a reward for that masterstroke? Shouldn’t that reduce rates as well?
Is not transparency a desirable goal ? If there is no attempt to hide anything,why not come forth at the beginning so no rumors start,Please open up and give us the truth.
I don’t know about you, but I haven’t had to refill the diesel in my generator for two years. Thank you to all the employees at OPALCO. Job well done.
I went to that web site, Suzanne, and looked for executive compensation, but it was not immediately obvious as you seem to imply. I also looked for OPALCO Form 990s in the OPALCO Archives but instead got a lot of PR about all that OPALCO was doing for us.
So I finally dug up the 2017 Form 990 on the web. Here it is:
https://www.opalco.com/wp-content/uploads/2019/05/2017-Form-990-Public-Disclosure-Copy_05082019.pdf
In 2017, Foster was receiving (some might say “earning”) a total of $399,038 in compensation, about what Alex wrote. Of that, $248,426 was salaries and $135,703 “other compensation.” This is usually the column in which non-profits report bonuses, not pensions or benefits.
Was foster getting a 34% bonus in 2017? Seems huge.
Seeing as how a US President makes about $550,000 a year including his personal travel and entertainment, yes this seems a bit high. Perhaps we should knock that down a bit?
For some context – here were the top 5 executive salaries at PSE in 2018.
President/CEO: $7.6m
Senior VP, CFO: $2.3m
Senior VP, CAO: $1.5m
Senior VP, General Counsel: $1.8m
Senior VP, Operations: $1.3m
Source: https://www1.salary.com/PUGET-SOUND-ENERGY-INC-Executive-Salaries.html
I understand the sticker shock when you add in all the retirement and other benefits but the bottom line is that we are going to have to pay well for good leadership in this field. Compensation and competition are both high for good candidates.
But the head of OPALCO does something for us that is good. The President, not so sure….
At the very least, Olson could post OPALCO’s 2018 Form 990 so anyone interested could do as I have done, which is add up the numbers and compare them year to year. The progression of substantial increases is as much an issue as the totals, especially when measured against performance reflected in results versus projections.
I don’t think it’s up to OPALCO to post this information. Anyone can access a 990 on their own.
I love the service and the extras that OPALCO provides.
I think Foster Hildreth is not overpaid considering what he could probably make elsewhere.
I agree with Vince Dauciunas that Foster is performing one of the most important jobs in the County. In fact, it is probably THE most important job in the County. Our economy would grind to a halt without electricity.
The only comparable job is that of County Manager Mike Thomas, who supervises a comparable operation when evaluated in annual revenues and expenses but is much larger in terms of total FTEs. And people are far more difficult to manage than electrons. I know from experience!
But I doubt Mike is earning anything close to $400,000 a year.
Using PSE salaries for comparison is ridiculous. PSE has 1.1 million customers, owns and operates electric-generating and natural-gas supplies and generates more than $3 billion — yes billion, with a ‘B’ — in revenues per year. The year Hildreth’s compensation was about $456,000, OPALCO’s revenue was about $27 million. Meanwhile, I see OPALCO has finally posted its 2018 Form 990 in its “documents library.”
Michael Riordan has got it exactly right. It is both simplistic and nonsensical to use size to determine salary, but being simplistic, it readily inflames those not familiar with the market for talent. OPALCO is not PGE (thank heaven), nor is it anything like a small mainland coop. OPALCO/Rockisland is a platypus and presents unique challenges. Our islands are unique; so is Foster’s job description, for which we should rightly compensate him
I’m glad we had forward thinking leadership at OPALCO and Rock Island. Sheltering in place would have been quite different without the reliable power and internet structure. The members‘ ability to video conference, add solar power to the grid and (most importantly) stream video would have been difficult without the leadership of Foster Hildreth (and Gerry Lawlor).
The compensation doesn’t bother me as much as the performance. Energy Members electric rates are up 60% since 2014. The wealthy can afford the increases and are happy to have fiber; where as, the middle class and households less fortunate are not as able to afford broadband service, while struggling to keep up with the rate increases. This is the problem. We need middle class wager earners on the Board; and women!