A recent review of financial documents from the US's top utility companies reveals that CEOs enjoyed an average 16% pay raise in 2025, bringing their compensation to $12.3 million. This increase comes at a time when consumers are grappling with soaring utility bills, which have risen as much as 40% in some regions since 2021, and utilities shut off power to customers 13 million times last year.
CEO Compensation Soars While Customers Struggle
The Energy and Policy Institute (EPI), an industry watchdog, found that CEO pay increased at 38 of the 51 largest utilities. The report highlights that some executives received raises despite failing to meet performance standards, including metrics related to outages. Many were also given perks such as private jets and condominiums, often paid for by customers.
“The issues feel unjust at face value,” said Jonathan Kim, a research associate with EPI and author of the report. “It’s the idea that we should be footing the bill for these people’s grotesquely large salaries.”
Utility prices remain a key driver of inflation, with consumers paying up to 6.7% more on electric bills between 2024 and 2025. Since 2017, CEO compensation has risen 47%, outpacing both inflation and worker pay. Customers of the examined utilities collectively paid over $5 billion for CEO compensation during that period.
Top Earners and Largest Raises
Bill Ferhman, CEO of American Electric Power, received the largest pay increase, with his compensation spiking by $23 million (176%) to $36.6 million. Tim Cawley of ConEd saw a $4.9 million (33%) increase to about $20 million, while Chris Womack of Southern Company received a $4.3 million (18%) raise to $28 million. Ferhman's pay rose even as his company turned off service 173,000 times.
In response, a ConEd spokesperson said: “Executive compensation is designed to attract and retain the leadership required to operate one of the most complex energy systems in the world... The majority of executive compensation is performance based and paid by shareholders.” Southern Company stated that its compensation program is tied to delivering “clean, safe, reliable and affordable energy.” An AEP spokesperson noted that compensation depends on meeting five-year performance targets, aligning leadership incentives with long-term interests.
Rate Hikes and Regulatory Challenges
Many CEOs received raises while pushing for price hikes. John Ketchum of NextEra Energy, the third-highest-paid CEO in 2025 with $24 million, saw his subsidiary Florida Power & Light request a record-breaking $6.9 billion rate hike. The structure of utilities—often regulated monopolies—limits customer choice and accountability. State-level utility commissions, typically run by political appointees, are often viewed as industry-friendly.
While CEO pay has a minor impact on individual bills, compensation packages are tied to profits and shareholder returns. “The justification for these huge bonuses is that it’s an incentive to increase shareholder profits,” said Chris Gilmer-Hill of the Michigan Environmental Justice Council.
Performance Metrics and Customer Service
Some executives received raises despite poor performance. Jason Wells of CenterPoint Energy got a $2.6 million bump even though he failed to meet reliability standards. In Minnesota, Xcel CEO Bob Frenzel received a maximum bonus for customer satisfaction after apparently lowering the threshold, amid rising complaints. His pay climbed $3.1 million (23%).
“They’re lowering the bar for customer outcomes,” Kim said. “People aren’t getting reliable service, but profits went up, so CEO pay also went up.”
Michigan Case Study
In Michigan, DTE Energy customers paid for raises for outgoing CEO Jerry Norcia ($14 million) and his replacement Joi Harris ($7 million), as well as perks like sports tickets and a company condominium. “DTE seems to see exorbitant bonuses as an incentive to maximize profits,” Gilmer-Hill said. Meanwhile, Consumers Energy CEO Garett Rochow failed to meet customer experience and safety standards but still received a $132,000 raise. Michigan had the highest utility disconnection rate in the Midwest in 2024.
Calls for Reform
Regulators and governments can take action. Michigan Attorney General Dana Nessel successfully fought against DTE including private jet travel in rate increases. Maryland passed legislation capping CEO pay at 110% of the public utility commission chair's salary. Similar proposals in Minnesota and Michigan are under discussion. “More policymakers are thinking about this,” Kim said.
