Pension hike lifts NStar chief’s ’09 take to $7.4m
Thomas J. May, who has run NStar since 1999, received a $1.8 million bonus and $2.4 million in stock awards in 2009.
By Todd Wallack
Globe Staff / March 17, 2010
NStar chief executive Thomas J. May received a nearly 40 percent increase in compensation last year, partly because of an accounting change in the value of his pension, boosting his total take to $7.4 million for 2009, according to a recent securities filing.
May, who has run the electric and gas utility since 1999, received a $1.8 million bonus, 6 percent higher than in 2008, and $2.4 million in stock awards, up 25 percent from the prior period. Caroline Allen, spokeswoman for NStar, said May was awarded a one-time retention stock award in 2005 that fully vested in April 2009.
May’s base salary increased a modest 4 percent to $1 million.
But the company noted that the bulk of the increase in May’s compensation was related to an accounting change and the bull market last year that boosted the value of his retirement benefits by $1.4 million. NStar said it was forced to increase the accounting cost of his pension because of a drop in interest rates. And May’s deferred compensation — money set aside in a trust — goes up and down with the stock market. Even without the boost in retirement pay, however, May’s pay would have increased by 12 percent.
In the filing, NStar said its financial performance in 2009 “continued to be very strong despite the weak economy.’’ It also said the reliability of its service was in the top quartile for the industry and customer service was the best in its history.
NStar’s operating revenue, which comes mostly from distributing electricity and gas, fell 5 percent to $3 billion last year. Its net income, however, rose 7 percent to $253 million. NStar shares, including reinvested dividends, rose 6 percent last year, compared to 10 percent for the Edison Electric Institute Index of utility stocks and 26 percent for the S&P 500 index of large companies.
NStar, one of the largest utilities in Massachusetts, has 1.1 million electric customers and 300,000 natural gas customers in the state.
Other NStar executives also received significant pay hikes.
For instance, NStar chief financial officer James J. Judge and general counsel Douglas S. Horan received 31 percent raises. Judge earned $2.5 million, while Horan earned $2.4 million. Most of the increase was due to the accounting change in the value of their pension benefits. But even with retirement benefits excluded, they received 9 percent raises.
Allen, the company spokeswoman, said the firm relied on a pay consultant, Towers Watson, and tried to offer compensation in the 50th percentile for urban utilities.
Todd Wallack can be reached at email@example.com.