Paul McElroy likes JEA and his job as CEO. The utility’s board likes him and the job he’s been doing.
Both sides were looking for stability.
Those were the themes for negotiating the renewal of JEA’s contract with McElroy, who has led the utility since 2012.
McElroy’s three-year contract extension was approved Tuesday by JEA’s board of directors with a $56,172 increase in salary, bringing the CEO’s salary to $437,172.
The increase was based on a study conducted by the utility’s human resources department that determined McElroy’s previous salary, $381,000, was lower than what most other top executives at publicly and investor-owned utilities are paid.
The study showed the median base salary for CEOs in the energy sector to be about $561,000. Add in the median potential performance bonus and the figure increases to around $1 million. McElroy’s contract with JEA includes up to a 15 percent performance bonus, which could bring his salary under the new contract to nearly $503,000.
Board chair Helen Heim Albee said JEA must offer fair compensation to be able to recruit and retain the best candidates and employees. When McElroy’s contract came up for renewal, she said he was the top choice for the job.
She pointed out that in the past three years of McElroy’s leadership, JEA has gone from close to the bottom among about 140 utilities that subscribe to the J.D. Power Customer Satisfaction Survey to the top tier and it’s one of the most improved utilities in the survey.
The board learned Tuesday that in the latest J.D. Power customer satisfaction survey of commercial electric customers, JEA is No. 3 in the nation and No. 1 in Florida.
Albee also cited McElroy’s administration holding JEA’s operating costs to 2012 levels despite declining sales, paying down debt, retiring bonds and returning $111 million to electric customers through a fuel credit.
“It’s critical to keep the talent we’re fortunate to have,” said board member Lisa Strange Weatherby.
The board was seeking continuity of leadership, considering the utility’s negotiations with the city over possibly increasing JEA’s contribution to the Police and Fire Pension Fund.
The utility also is in the early stage of developing a strategy to comply with the new EPA Clean Power Plan that would significantly increase its use of natural gas and nuclear power to reduce carbon emissions.
McElroy said while his salary — even with the increase that goes into effect Oct. 1 — was below the median for his peers in the industry, there’s more to the job than the paycheck.
“It goes back to why I’m here in Jacksonville to begin with,” he said.
Before becoming JEA’s chief financial officer in 2002, McElroy was vice president and general manager of Bombardier Capital Corp. and previously held the same position with Pitney Bowes Credit Corp.
He said he and his family lived in Atlanta, Dallas, Chicago, Los Angeles and Toronto before he decided it was time for his family and more stability.
“I stepped off the corporate relocation wheel,” McElroy said.
He said the quality of life and cost of living in Jacksonville also were factors in his decision to renew the contract. In terms of living expenses, $500,000 in Jacksonville is comparable to $1 million in some of the other cities where he has worked, McElroy said.
“And there’s no state income tax,” he added.
The board voted 6-1 to approve McElroy’s new contract, with Husein Cumber casting the only vote against the renewal.
He made it clear to the board he was in support of retaining McElroy as CEO, but questioned JEA’s process of evaluating executive contracts. Cumber said a compensation committee should be established for future executive position negotiations.
The board also approved up to $1 million for a study to determine the best option for the utility’s aging Downtown headquarters.
A consultant will be retained through the Request for Proposals process to evaluate whether to renovate the existing buildings; demolish the tower and customer service center along Church Street and rebuild on the site; or move JEA and about 800 employees to the suburbs.
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