Pay for former NIPSCO CEO jumps

2013-04-15T15:30:00Z 2014-04-07T13:53:09Z Pay for former NIPSCO CEO jumpsBy Keith Benman keith.benman@nwi.com, (219) 933-3326 nwitimes.com

Former NIPSCO CEO Jimmy Staton's pay almost doubled to $3.56 million in 2012, as he continued to earn rewards for reaching a landmark electric rate case settlement at the utility in late 2011.

Staton's 2012 pay compares to his 2011 total compensation of $1.85 million, with a significant part of his pay bump also due to his increased responsibilities as leader of parent company NiSource Inc.'s pipeline business, according to NiSource's proxy statement.

Staton's increase came mainly in the form of stock awards totalling $2.31 million, as compared to just $607,555 the year before.

"Jimmy's compensation is reflective of his work across both business segments, NIPSCO and the pipeline group," said NiSource spokesman Mike Banas.

Staton was CEO at NIPSCO from March 2010 until September of last year, when new hire Jim Stanley took over that job so Staton could concentrate on his duties as group CEO for NiSource's multi-state pipeline business. Staton had done the NIPSCO job and the pipeline job in tandem since September 2011.

Staton's pay increase came despite negative adjustments in short-term incentive payments for NiSource executives following safety shortcomings and two disastrous incidents at subsidiaries, according to the proxy.

CEO Robert Skaggs Jr. actually saw his overall compensation fall 6 percent to $4.68 million as compared to 2011, according to the proxy statement filed Monday with the Securities and Exchange Commission.

That pay decrease for Skaggs came in a year in which NiSource's total shareholder return easily bested the S&P utility average and operating earnings exceeded targets. The company also increased its dividend and increased its workforce by 325 people.

But the proxy statement specifically cites disastrous pipeline explosions in Springfield, Mass., and Sissonville, W.Va., as leading to a 40 percent reduction in short-term cash incentive payments that would have been due Skaggs based on the other performance measures.

In the Springfield incident, a Columbia Gas worker responding to a report of a gas leak on Nov. 23 accidentally pierced a gas line, ultimately setting of an explosion that leveled a downtown strip club, damaged 40 other buildings and injured 18 people. It was later determined the worker had followed proper procedure but was misled by sidewalk markers for the pipeline that were inaccurate.

In Sissonville, a 20-inch Columbia Gas pipeline exploded Dec. 11, setting off a raging inferno that destroyed four homes, damaged five more and melted a swath of interstate. Several people were treated for smoke inhalation, but there were no fatalities.

Staton and two other top executives had their short-term cash incentives reduced by 10 percent due to the safety lapses, according to the proxy. No executive received a discretionary bonus. However, the three executives still realized overall compensation increases from the prior year.

Pay for NiSource's most highly compensated executives is set by the Officer Nomination and Compensation committee of the company's board of directors. It is comprised solely of independent directors.

The proxy statement also points out NIPSCO was the only subsidiary to meet its safety goals for the year, with other utility subsidiaries falling short.

Staton's work on the NIPSCO rate cases was also cited in each of the past two year's proxy statements in setting his compensation package.

NIPSCO has 457,000 electric and 786,000 natural gas customers in northern Indiana. NiSource has 3.8 million energy customers, mainly in the Midwest and Mid-Atlantic states.

 

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