South River Electric CEO's pay 'excessive,' member says
Posted March 21, 2011 6:00 p.m. EDT
Updated March 21, 2011 7:19 p.m. EDT
Raleigh, N.C. — Long considered a valued power source and community partner, South River Electric Membership Corp. is now getting some static from some frustrated members.
Laurie Chancy, a Sampson County tobacco and sweet potato farmer who relies heavily on the cooperative's electricity for her greenhouse and storage facilities, said recently that she and other South River members were stunned to learn about some board practices and executive pay.
Tax records show Chief Executive Buddy Creed makes $484,000 in total compensation to run the not-for-profit utility, which has 98 employees and about 42,000 customers.
“To me, it seemed excessive,” Chancy said.
South River public affairs manager Cathy O'Dell stressed Creed's experience and expertise. Plus, she said, the corporation uses an outside human resources consultant to recommend employee pay in line with similar sized co-ops.
“We pay within fair market value,” O'Dell said.
WRAL Investigates found Creed's pay tops most of his electric co-op peers around the state. The head of French Broad Electric Membership Corp., for example, makes $185,000, while Wake Electric Membership Corp.'s chief makes $402,000 and the head of Carteret-Craven Electric Membership Corp. makes $228,000.
“Why does anybody need to make that much money? You know nobody needs to make that much money,” South River member Jonathan Temple said.
“It creates suspicion and unrest,” member Cris Jackson said. “That really gets people's attention.”
Another thing getting attention is the South River Board of Directors meeting policy. Members who want to attend must fill out an application weeks in advance.
“The secrecy of it all is the red flag,” Chancy said.
O’Dell said the board just wants efficient, organized meetings. With the notice policy, there's no record that a member applied and attended a board meeting ever.
“I feel like we communicate very well with our members,” O’Dell said.
Yet, even with the South River website, press releases and monthly magazine, some critics said they still see a disconnect.
Longtime members are entitled to share in company profits each year, but 10 years ago, the board quietly decided to discount lump-sum payments when members die, which Jackson said was a surprise.
“We want people to have what they've earned,” Jackson said.
“It's not in an account somewhere drawing interest,” O’Dell said. “That money is out there in the lines, in the substations, in the transformers.”
O'Dell cites South River's customer service ratings and service projects as evidence the utility meets its mission. Some members said they think the mission needs to be rewired.
“Maybe we'll get some new board members on the board of directors with new eyes, minds and voices, and I think that's what we need,” Chancy said.