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                                                                    EXHIBIT 10.1

                             POWELL INDUSTRIES, INC.
                  INCENTIVE COMPENSATION PLAN FOR 2001 ("PLAN")


1.       PLAN PURPOSE

         This Plan is one element of the executive compensation program at
         Powell Industries, Inc. ("Company") and its subsidiaries. The Plan
         provides key corporate and subsidiary employees the opportunity to earn
         annual cash incentive compensation amounts based on (a) the performance
         of the Company or the subsidiary for which they have direct
         responsibility as a result of their employment and (b) that employee's
         potential individual contribution to the performance of those entities.
         Thus the Plan provides a variable annual incentive that links pay to
         performance.

2.       GENERAL DESCRIPTION

         Key corporate and subsidiary executives and managers will be designated
         annually to be Participants in the Plan. A maximum potential incentive
         compensation amount ("Maximum IC Amount") will be set annually for each
         such Participant based on that Participant's potential individual
         contribution to the performance of the Company or subsidiary. This
         Maximum IC Amount may range from ten per cent (10%) to one hundred per
         cent (100%) of a Participant's base salary on the first day of the
         fiscal year of the Company ("Plan Year").

         Each Participant may earn between zero and one hundred percent of this
         Maximum IC Amount ("Earned IC Amount") depending on how the Company or
         subsidiary that employs the Participant performs during the Plan Year
         against pre-established performance targets. Plan performance measures
         for 2001 are described in paragraph 4 below.

         Performance targets vary by entity and will be established annually for
         the Company and each subsidiary based on that entity's historical
         performance, mission and business strategy, and projected profit and
         growth capability. Prevailing general business conditions will also be
         considered in establishing the performance targets.

         The Compensation Committee of the Company's Board of Directors in
         conjunction with the Company's Chief Executive Officer ("CEO") will
         administer the Plan.

3.       ELIGIBILITY

         Participants will be designated annually. Participation in one year
         does not guarantee participation the following year.

         Subsidiary presidents will recommend Participants and a Maximum IC
         Amount for each Participant to the CEO for approval. Each subsidiary
         president may also recommend to the CEO an incentive "pool" for
         employees of the subsidiary who are not Plan Participants.

         The CEO will recommend corporate Participants and their Maximum IC
         Amount for approval by the Compensation Committee, and the CEO may
         authorize use of an incentive "pool" for employees of Powell
         Industries, Inc. who are not Plan Participants.

4.       PERFORMANCE MEASURES AND TARGETS

         Earned IC Amounts will be determined by the performance of each
         subsidiary and the Company overall ("Corporate") on the following
         weighted performance measures.

         PERFORMANCE MEASURES FOR SUBSIDIARY PARTICIPANTS

         o    67% Weighing: each subsidiaries' Return On Net Assets (earnings
              before interest and taxes divided by the average net of total
              assets less current liabilities)

         o    33% Weighting: each subsidiaries' Growth in Earnings Before
              Interest & Taxes (EBIT$) Over Prior Year EBIT$

         PERFORMANCE MEASURES FOR CORPORATE PARTICIPANTS

         o    50% Weighting: the Company's Growth in Earnings Per Share Over
              Prior Year

         o    50% Weighting: the Company's Return On Equity (earnings after
              interest and taxes divided by average shareholder equity)



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                  INCENTIVE COMPENSATION PLAN FOR 2001 ("PLAN")


         The CEO will establish at the beginning of the Plan Year for each
         subsidiary and the Company a minimum and maximum target range for each
         performance measure. Each subsidiary will have unique targets. The
         Compensation Committee will review performance measures and targets for
         subsidiaries and will review and approve performance measures and
         targets for the Company. The CEO will approve measures and targets for
         each subsidiary. Targets will be communicated to Plan Participants.

5.       COMPUTATION OF AWARDS

         IC Plan Calculation Forms will be prepared annually for each subsidiary
         and the Company listing Participants, their base salary at start of
         Plan Year, and their Maximum IC Amount. Each entity's actual
         performance for Plan Year compared to the pre-established target range
         will determine the Earned IC Amounts for that entity's Participants.

         If the minimum of the pre-established target range is not exceeded,
         there will be no Earned IC Amounts for that entity's Participants under
         that performance measure. Performance above the minimum up to the
         maximum of the target range results in Earned IC Amounts equal to the
         Maximum IC Amounts (adjusted by the weightings set forth in paragraph 4
         herein) multiplied by the percentage portion of the target range that
         is achieved for the Plan Year. If the maximum of the range is exceeded,
         Earned IC Amounts for that measure may not exceed the Maximum IC
         Amounts.

         The CEO may authorize use by a subsidiary of separate or additional
         performance measures and targets for that subsidiary or for certain of
         its Participants provided such use is, in the best business judgment of
         the CEO, compatible and consistent with the Plan's purpose and
         provisions. If additional performance measures are used in combination
         with any measure set forth in paragraph 4 above, the minimum range of
         at least one measure listed in Paragraph 4 must be exceeded for any
         Earned IC Amount to be derived from the additional performance
         measures.

         In addition to the Earned IC Amount a Participant may earn under this
         Plan, the Compensation Committee may, in its sole discretion, make an
         additional discretionary award to a Participant to recognize
         significant individual contributions. This discretionary award may not
         be more than thirty percent of the Participant's Maximum IC Amount.

         The Compensation Committee, in conjunction with the CEO, may for the
         purpose of this Plan adjust the financial results of a subsidiary or
         the Company to eliminate extraordinary charges or credits to earnings
         provided such charges or credits are in the reasonable business
         judgment of the Compensation Committee caused by events materially
         beyond the control of the Participants employed by that entity.

         Individuals may be named by the CEO as a Participant in the Plan after
         the beginning of the Plan Year. Their Maximum IC Amount will be a
         percentage of their base salary when they become Participants prorated
         to reflect that portion of the Plan Year for which they were a
         Participant.

6.       PAYMENT OF AWARDS

         Earned IC Amounts will be determined after the audited financial
         statements of the Company for the Plan Year are complete and then paid
         in cash as soon as practical. A Participant must be an employee in good
         standing on the last day of the Plan Year to receive their Earned IC
         Amount, except that Participants who die, retire, or become disabled in
         the Plan Year will receive a prorated amount based on the portion of
         the Plan Year for which they were a Participant. Prior to payment of
         the Earned IC Amounts for all Participants, the Compensation Committee
         will review and certify all such amounts. Amounts due Participants
         under the Plan are an unfunded, general obligation of the Company.

7.       ADMINISTRATION OF PLAN

         The Compensation Committee, in conjunction with the CEO, administers
         the Plan. The Committee reserves the right to amend or terminate the
         Plan at any time. If the Plan is amended or terminated and as a
         consequence the Earned IC Amount of any Participant which would have
         otherwise been earned is eliminated, a part year Earned IC Amount shall
         be determined for each so affected Participant and such amount should
         be paid in cash to such Participants within thirty (30) calendar days
         of amendment or termination. Such part year Earned IC Amount shall be
         determined by using the unaudited year to date financial statements of
         the Company to estimate (including making provision for annualizing
         part year results) what each such Participant's full year Earned IC
         Amount would have been absent the amendment or termination, and this
         full year amount shall be prorated to a part year Earned IC Amount
         based on the number of full elapsed months of the Plan Year prior to
         amendment or termination divided by twelve.

                                       END


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