JACKSONVILLE, Fla. — A document obtained by the special City Council committee investigating JEA shows top utility executives could have gained the most from a controversial incentive plan that would have showered millions of dollars in financial gains on them if JEA had been sold.
The performance unit plan, which eventually played a large role in sinking the sales process when details of it became public, would have let JEA employees purchase units and then redeem them in the future based on the utility’s financial performance.
The redemption would have occurred in three years, but if JEA were sold, the benefit would have been accelerated and employees holding the units would have gotten big paydays when an investor-owned utility bought JEA.
City Council Auditor Kyle Billy told the council last November if JEA were sold at a price that resulted in a net gain of $4 billion for the city, JEA employees would reap a total of $315 million based on them putting just $1 million of their own money into buying 100,000 units at a cost of $10 per unit.
If a sale netted $5 billion for the city, then JEA employees in the performance plan would cash in $636 million off a total $1 million investment, Billy said in his report to the council.
The amount pocketed by an individual employee would have depended on how many performance units an employee had acquired, which in turn would have hinged on how many units were made available to the employee.
The City Council investigative committee has been pushing for answers on how the performance units would have been apportioned among JEA’s 2,000 employees to see which employees would have had the biggest opportunity to purchase the units and have a shot at the largest financial windfall.
The JEA document recently obtained by the committee shows that back in June 2019, utility executives were looking at a plan in which the bulk of the units would have been set aside for high-ranking employees to purchase as part of an incentive pay program.
Steve Busey, a private attorney hired by City Council to assist its investigation, wrote in an email that the spreadsheet shows a concept where utility executives would each be able to purchase 1,079 performance units while non-executive JEA employees would be able to each purchase eight to 80 units.
The JEA board approved the performance unit plan at the July meeting when the board also authorized putting the utility up for sale. In December, the board killed the incentive plan, which never went into effect, and also canceled the sales negotiations after ousting Aaron Zahn as CEO.
The former board has been entirely replaced by a new board that started meeting in April and voted Tuesday to bring back retired utility executive Paul McElroy, who stepped down in April 2018, to serve as interim CEO while the board conducts a national search for a permanent CEO.