Opinion ID: 2329066
Heading Depth: 1
Heading Rank: 4

Heading: Total Adjusted Test Year Revenue Requirement

Text: Pine Tree finally challenges the commission's decision that its president, Tim Hutchinson, was overcompensated. The commission first found that Pine Tree has proven, albeit by a narrow margin that Mr. Hutchinson's test year base salary of $122,460 (excluding bonus) is not unreasonable. The commission also considered Pine Tree's fringe benefit plan and held that: Because ... internal checks and balances tend not to exist in companies like Pine Tree, the utility must make a strong showing to the Commission that [bonus] expenses are reasonable. While a close call, we find here that Pine Tree made such a showing. Despite finding Hutchinson's base salary and Pine Tree's bonus plan were both reasonable, the commission concluded that Hutchinson's total salary, consisting of his base salary of $122,460 and a bonus of $18,550, was unreasonably high. The commission based its conclusion on the testimony of staff witness, Richard Kania. Kania testified that he conducted a study of the salaries of the chief executives of other Maine independent telephone companies and concluded that Hutchinson's compensation was well over twice the average salary for other chief operating officers of Maine independent telephone companies. Pine Tree asserts that the commission's conclusion was an abuse of discretion and attacked the study produced by commission staff because it failed to account for such factors as the number of hours each executive spent working on telephone company activities. [17] Although we may have reached a different conclusion, we find sufficient evidence in the record before us to support the commission's decision. Despite the study's failure to include the hours worked or the duties performed, the study showed that the average salary for independent telephone companies in Maine was less than half that of Hutchinson's salary. Furthermore, it is not an abuse of discretion for the commission to find that, although the base salary and bonus plan are both reasonable when standing alone, they are unreasonable when combined. The entry is: Order of the Commission affirmed. All concurring.