Who is the Highest Paid ‘Federal Employee’ in America?

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By on November 15, 2017 in Pay & Benefits with 0 Comments

Packs of hundred dollar bills scattered into a large pile against a white background

Which government employee receives the highest level of compensation in the country?

A recent article describes Tennessee Valley Authority (TVA) CEO Bill Johnson as “the highest paid federal employee in the country.”

Pay Raise Breaks the Million Dollar Mark

Johnson’s annual base salary last year was reported to be around $995,000, and he collected about $4.9 million in total compensation.

After recently being awarded a 5.5% base pay increase, that will increase his annual base pay will to about $1,049,725. After the pay increase, his new total compensation package is expected to top $6 million according to the TVA.

Johnson’s pay is based in part on performance goals of the TVA. According to the Knox News article:

About 70 percent of Johnson’s total compensation package is what TVA calls at-risk pay. Performance metrics and the TVA board determine how much of the at-risk pay TVA employees, including Johnson, take home.

This year, TVA reported the company exceeded its goals, earning 103 percent of the company at-risk pay. So, Johnson and all other TVA employees will receive the full amount, plus a three percent bonus.

The article also noted that the TVA board said that Johnson’s pay is “comparatively low” relative to the salaries of other utility companies that are not a public service.

Year-End Bonuses for Employees

The Chattanooga Times Free Press recently reported that the average year-end bonus soon to be distributed to over 10,000 TVA employees will average $10,970. That represents about a 15% increase over bonuses paid last year. The bonuses are being distributed to employees after the TVA board determined that the agency had exceeded its annual performance goals by reducing debt, injuries and emissions.

About the TVA

The Tennessee Valley Authority is a government corporation. It was established by Congress in 1933 to help the Tennessee Valley overcome environmental and economic problems. Today, TVA provides power for all of Tennessee and parts of six bordering states.  Its employees are not traditional federal employees.

TVA does not pay state, local or federal taxes as it is a federal government entity. However, it does pay tax equivalent payments to the states of 5 percent of its annual revenues. Private TVA bondholders do not pay state income tax on the interest on TVA bonds, lowering the interest rate that the TVA pays on the bonds.

It operates like a private company. It has a board of directors with authority to hire and fire employees and executives who are not subject to Civil Service laws, make investment decisions, prepare and execute the budget, and oversee all facets of TVA operations.

As part of the federal government, the board is nominated by the President and confirmed by the Senate. Its budget is approved by Congress. Its employees are prohibited from striking.

The TVA is exempt from state and federal antitrust laws. It is also generally exempt from Security and Exchange Act regulation except for reporting and state and local electric rate setting.

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

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