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Trump Fires TVA Board Chair, Criticizes CEO Pay

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MATT MOON / WUOT NEWS
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President Donald Trump on Monday fired Tennessee Valley Authority board chairman James Thompson and board member Richard Howorth. The president also criticized TVA CEO Jeffrey Lyash’s compensation package and indicated he would work to cut it.

The sudden announcement came as Trump spoke to reporters after signing an executive order aimed at keeping federal agencies from outsourcing jobs to foreign workers.

This spring, TVA announced plans to outsource one-fifth of its information technology jobs to private companies in order to save money. In June the agency said it planned to outsource 62 remaining IT jobs in Chattanooga and Knoxville. Those workers’ jobs were to end 90 days after the announcement, or in early September. The decision was vigorously opposed by a group called U.S. Tech Workers. The group recently commissioned TV commercials urging Trump to stop the outsourcing.

“If the TVA does not move swiftly to reverse their decision to rehire their workers then more board members will be removed. We have the absolute right to remove board members," Trump said Monday.

Tennessee Valley Authority board members serve at the pleasure of the president, spokesman Jim Hopson said in a statement. The board will be able to continue its work without Thompson and Howorth, he added.

TVA defended the outsourcing this spring, saying many of the jobs would stay in the United States, though under vendors instead of in-house.

“All jobs related to TVA’s Information Technology department must be performed by in the U.S. by individuals who may legally work in this country,” Hopson said.

At approximately $8 million a year, Lyash’s compensation is the highest of any federal employee, though his base salary is less than that of his predecessor, Bill Johnson. Lyash succeeded Johnson in February 2019. Trump said he didn’t know Lyash, but criticized his salary and incentives package as “ridiculous.” TVA is a unique federal entity in that its operational costs are not funded by tax money.

Compensation for TVA executives has drawn criticism before, but the agency has said its salary and benefit packages are comparable to those of private utility companies.

"TVA employees do not receive federal health or retirement benefits.” Hopson said. “Benchmarking other utility peers who are competing for the same talent is the only method available to create a competitive compensation system."

TVA is currently trying to convince its biggest customer, Memphis Light, Gas and Water, to resign its contract with the federal utility. Several different studies have found that MLGW would save between $100 and $400 million by leaving TVA and buying its electricty from elsewhere. Lyash has been the face of the public campaign to persuade Memphis leaders and residents otherwise. 

Trump told reporters he wants to slash Lyash’s pay through an infrastructure bill currently in Congress. The president said he wanted to see the CEO’s pay cut to no more than $500,000 a year.

This story was reported by WUOT.