Jeff Lyash: Still Progress Energy's influential Florida man, even after risk-free relocation
Wake up and good morning. It's been a great compensation ride for former Progress Energy Florida CEO Jeff Lyash, who last year was promoted to become Progress Energy's -- as in the parent company in Raleigh, N.C. -- executive vice president of corporate development while still maintaining plenty of community and business/political involvement here in the Sunshine State. (Photo of Lyash in downtown St. Petersburg by St. Petersburg Times' Cherie Diez.)
Progress Energy's proxy statement, the annual disclosure of executive pay, shows Lyash received $1.95 million in 2009.That sum is up from Lyash's $1.74 million pay in 2008 but down from 2007's $3.2 million, owing to the impact of the recession. Still, Lyash's 2009 pay actually elevated his compensation to the 2nd highest among executives in the entire company, behind CEO William Johnson's $6.5 million.
Why do we care? For several reasons. Lyash has established himself in Florida as a formidable player, both in pushing for a new nuclear power plant to be built north of Tampa Bay in Levy County and as an influential in promoting economic development in this state. He helped organize last year's first conference between Tampa Bay and Orlando to explore super-regional cooperation. He co-led the ABC coalition as it explored new stadium options for the Tampa Bay Rays. And he was the front man promoting the complex pitch for a new nuke plant in Levy County, while defending the state legislature's decision to allow much of the advanced costs of building the plant to be paid in higher rates charged Florida customers.
No less important is Lyash's less visible role in Progress Energy's determined strategy to make a comeback from January's historic decision by the Florida Public Service Commission rejecting a major rate increase sought by the electric utility in Florida. Wall Street analysts since then have drubbed Progress Energy as if it was the power company's own fault (and perhaps it is) for even allowing a rate proposal to go before the Florida PSC with out its favorable outcome being fairly certain. In CEO Johnson's shareholder letter, on page 2 of the company's own 2009 annual report, Johnson continues to refer to the Florida rate decision as "disappointing" and, on the same page states this (italics are mine):
"We are also evaluating our regulatory and financial options in Florida and are continuing to do our part to foster a constructive Florida regulatory climate that will enable us to attract the capital required to meet our customer and environmental obligations."
There's one other tidbit, a sign of the times, worth noting about Lyash's shift of responsibilities from CEO of Progress Energy Florida in St. Petersburg to his relocating to Raleigh as a corporate EVP. Since Lyash could not sell his Florida home in this down market, Progress Energy bought it from him. And then paid him for any loss in market value. (That's not uncommon in higher corporate circles, but it's a revealing anecdote given the severity of Florida's housing market collapse and how senior managers in corporate America are so completely shielded from financial risk.)
Here are the terms of that deal:
* The company bought Lyash's Florida home at a price equal to the average of two independent appraisals after he was unable to sell the home within a 60-day marketing period. That purchase price was well below what Lyash originally paid for his house here so the company agreed to pay him the difference between the price he paid for the Florida home (excluding the cost of improvements made subsequent to such purchase) and the purchase price paid by the company based on the independent appraisals. That difference was $80,000.
* Lyash also received "standard relocation benefits" totaling $53,005 that included travel expenses, the equivalent of one month’s salary, temporary housing, shipment of household goods, and closing costs in connection with his purchase of a home in North Carolina.
* Lyash even got help covering the additional taxes levied on all this support. States the company: "In light of the fact that the relocation was required by the company and because this make-whole amount paid to Mr. Lyash will be treated as income to him, we agreed to provide Mr. Lyash with a tax gross-up on amounts from this transaction that are considered taxable income."
That tax gross-up: $42,569. There's more, on page 47, of the shareholder proxy if you're inclined. Nice work if you can get it in these challenging days.
-- Robert Trigaux, Times Business Columnist