Top CPS Energy leadership taking pay cut would show solidarity with customers, says San Antonio professor

City Council to vote on proposed 3.85% rate hike this week

SAN ANTONIO – As a proposed CPS Energy rate increase heads to the San Antonio City Council for a vote this week, some customers are saying not so fast. Many left in the dark during last year’s winter storm are asking why utility leaders aren’t taking a pay cut instead.

On Monday, CPS Energy’s Board of Trustees voted unanimously to approve the utility’s request for a 3.85% rate increase. This Thursday, San Antonio City Council will vote on the issue that, if approved, would become effective March 1.

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The company says the increase and regulatory asset to cover the fuel costs for the February 2021 winter storm will bring about $73 million, translating to about $5 more for average customers on their monthly bill.

During an interview last week, CPS Energy interim President and CEO Rudy Garza told Councilman Clayton Perry that the funds would cover infrastructure and technology upgrades and employee pay.

“We’ve got to remain competitive -- so how we structure our compensation has to look at who we are competing with, but none of these dollars are going towards any bonus structure,” he said.

“I wanna be clear about that with our community. What we are talking about is linemen, gas technicians. We’re talking about engineers, accountants, analysts. We’re talking about the front-line employees that we’ve got to have to operate our system.”

Some customers ask why CPS Energy’s top officials aren’t taking a pay cut to help meet the revenue challenges. An April 2021 list obtained by the Defenders showed pay for 41 CPS Energy executives ranged from $155,000 to $485,000 for the then-president and CEO, Paula Gold-Williams, who has since stepped down.

ALSO ON KSAT.COM: Winter storm issues exposed a cascade of scandals at CPS Energy in 2021

Cody Cox, chair of Management and Marketing for the Greehey School of Business at St. Mary’s University, said it’s not common for top leaders in companies to take pay cuts. Still, it is notable when it does happen.

“We don’t see it as often. One reason is senior leadership in organizations often have compensation through other mechanisms like stock options, so salary may not be as big a part of their compensation. So while it helps to show solidarity, it doesn’t fix budget problems,” Cox explained.

He said some researchers have been talking about organizations adopting a more fair compensation strategy to keep CEOs in line with employees.

“It’s something a lot would argue that CEO compensation is so much greater than employees, it could lead to CEOs being motivated for short-term benefits,” Cox said.

KSAT reached out to CPS Energy to see if any executives were taking pay cuts or planned on doing so, but we have not received a comment on the matter.

About the Authors:

Patty Santos joined the KSAT 12 News team in July 2017. She has a proven track record of reporting on hard-hitting news that affects the community.