The requirements and formula haven’t changed, but how JEA might choose to reward its employees for meeting performance goals was clarified Tuesday by the utility’s Compensation Committee.
The committee was formed after Mayor Lenny Curry replaced six of the seven board members he asked to resign.
It is charged with assisting the board in fulfilling its oversight responsibilities by reviewing compensation policies and strategies for JEA’s 2,000 union-member and appointed executive employees.
The committee reviews and makes recommendations, which must then be approved by the full board.
“This committee represents our purpose,” said board member Delores Kessler, chair of the committee. “We asked a lot of questions and got this where it needs to be.”
Employee compensation became an issue last year when JEA announced its top executives and some managerial employees would receive bonus checks, referred to by JEA as “pay for performance,” ranging from $15,000-$50,000. The rank-and-file union members received an average of $1,700 in performance pay.
The bonuses were — and will remain — based on employees meeting specific goals.
Chief Human Resources Officer Angie Hiers said salaries and bonuses for union employees are based on how JEA’s pay scale compares to other utilities — both not-for-profit and investor-owned — and similar industries.
“The compensation market is based on the established or accepted rate of pay for a job,” she said.
She described the overall compensation survey conducted every two years as “comprehensive” and also said before a new contract is negotiated with a union, an additional compensation survey is conducted to “refresh” the data.
The 2016 pay-for-performance plan will be based on achieving goals set for customer satisfaction, service reliability, safety and cost control.
Any payout must be based on savings, the savings must exceed the cost of the payout and the payout must be covered by operating cash flow.
Potential payouts would equal about 3 percent of an employee’s annual salary if the goals are met and as much as 4 percent if an employee greatly exceeds the goals.
Hiers said that policy is consistent with other utilities and does not represent a change in policy for JEA.
“It was always understood. Now it’s clearly stated in a document,” she said.
The potential 2016 performance bonus for JEA CEO Paul McElroy was reviewed by the committee as a separate item.
His bonus will be determined by McElroy for meeting the utility’s budget, improving system reliability, implementing capital improvements, stabilizing revenue, improving satisfaction among customers and employees and maintaining “positive and constructive relationships” with key stakeholders.
McElroy said JEA has about 100 stakeholders, such as city government, environmental groups, historic preservation organizations and neighborhood and home owners’ associations.
Board chair Tom Petway questioned whether it’s appropriate to have employee and management performance standards based on revenue and cost of operation, both of which are dependent upon weather.
Petway referred to weather as a “wild card” when it comes to running a utility, since it’s difficult to predict how hot, cold or dry weather may affect sales of electricity and water. He pointed out it’s been 12 years since Jacksonville was struck by a hurricane, which increases JEA’s cost for overtime and repairs.
McElroy agreed and said in the case of widespread power outages, JEA spends money to restore power to customers, but customers can’t purchase electricity when their service is interrupted.
Petway asked for a presentation from JEA staff for the board when it meets Jan. 19 to review and discuss the bonus program rather than placing the program on the consent agenda and approving the committee’s recommendations.
“I don’t want to be a rubber stamp,” he said. “This is something we’ll have to live with.”
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