Southern Co. Chief Executive Thomas Fanning got a nearly 34 percent raise last year, to $15.8 million, although much of the compensation was related to changing valuations of his pension benefits.
Still, Fanning’s non-pension pay such as salary, stock awards and bonus increased by $930,000 last year — equivalent to a nearly 8 percent raise — even as the Atlanta-based utility continued to struggle with mounting cost overruns at two of its biggest power plant projects.
One of those problems grew to crisis portions this week with the bankruptcy filing of Westinghouse Electric, the key contractor building two new reactors for Georgia Power at the Plant Vogtle nuclear power complex near Augusta. Georgia Power, a subsidiary for Atlanta-based Southern Co., is the lead partner of the project.
Fanning flew to Tokyo this week ahead of Westinghouse’s bankruptcy filing to talk to executives at its parent company, Toshiba Corp., about committing to pay billions in cost overruns on the Vogtle project.
Georgia Power scrambled to keep work going on the construction project while it analyzes whether it is still viable, and how much it will cost to complete it.
The project is already over three years behind schedule and over $3 billion over budget. The fallout from Westinghouse’s Chapter 11 reorganization is widely expected to bring more costs and delays.
Meanwhile, another Southern subsidiary, Mississippi Power, has been hit with delays and billions in costs overruns as it struggles to get an advanced-technology “clean coal” power plant running properly.
Last year, Southern’s profits grew about 4 percent, to $2.5 billion.
Southern Co. said 2016 “was a successful year for us” and that Fanning and other top executives exceeded pay performance goals tied to the company’s profits, according to a company filing to the U.S. Securities and Exchange Commission.
However, those profit targets also excluded the impact of the troubled Mississippi plant’s cost overruns and certain other costs, according to the March 24 proxy filing.
Last year, Fanning, 60, received a $1.3 million salary, a $2.7 million bonus, $7.8 million in stock awards, and $119,667 in perks such as personal use of company aircraft and financial planning services.
Southern estimated that the value of Fanning’s pension benefits increased by almost $3.9 million last year because of various factors such as lower interest rates and Fanning’s pay increases and rising age.