Updated: April 4, 2014 at 10:27 pm
The Colorado Springs City Council will reconsider a six-figure pay raise for Colorado Springs Utilities CEO Jerry Forte.
But this time, the council will be asked to phase in a $170,425 raise over three years.
Councilwoman Jan Martin, a member of the Colorado Springs Utilities personnel committee, is bringing the salary issue back a month after the council rejected a $171,000 salary increase for the Utilities CEO.
Martin said the CEO's salary needs to be competitive in the market or it leaves the city-owned utility vulnerable to recruiting raids.
"We have to understand Utilities is a $1 billion corporation," she said. "It is one of the largest employers in the city. And because of all the federal regulations, it is a position that requires very specific expertise."
Forte's base salary is $276,750 a year - 38 percent below the market median of CEOs who run utilities of similar size and scope, according to a study commissioned by the Utilities board.
The new proposal would provide an 8.8 percent salary increase in 2014, a 9.3 percent increase in 2015 and an 8.5 percent increase in 2016. That would bring Forte's base salary from $276,750 to $447,175.
"We felt spreading it over three years would help address some of the concerns raised early," Martin said.
Initial reports of the $171,000 pay hike drew howls from many in the community, and the council backed away from the proposal.
The council will hear the new proposal at its meeting Tuesday.
The new proposal would increase the CEO's base salary but eliminate the annual performance incentives, which have been about $60,000 a year. In March, the Utilities board said Forte's 2013 performance "exceeded expectations." On a scale of 1 to 5, Forte earned a 4.02, similar to the grade he has earned in years past.
If the new salary proposal is approved, Forte still would receive the incentive pay for his 2013 performance.
Forte declined comment.
A study of the salaries of 42 CEOs at other utilities operations throughout the U.S. shows Forte's compensation - base salary and incentive package - 45 percent below the market's median. And with Forte and 60 percent of other utilities executives eligible for retirement, it threatens continuity, Martin said.
If Forte retired now, she said, it could cost as much as $600,000 a year to hire a new CEO based on the market. Utilities had difficulty recruiting additions to its executive team because of lower-than-market compensation, Martin said. One general manager position sat vacant for more than a year before someone was promoted internally, she said.
"It's important to make the CEO's pay more competitive with similar utilities. Retaining and attracting qualified leadership is critical to maintaining the reliable service, reasonable rates and excellent customer service that our customers have come to expect," Martin said. "A top 10 percent ranking in customer satisfaction in the United States by J.D. Power and Associates doesn't happen without strong utilities leadership."