As natural-gas providers the Southern Connecticut Gas Co. and Connecticut Natural Gas petition state utility regulators for permission to lay off roughly 70 employees, state Attorney General Richard Blumenthal is sharply criticizing a $21.8 million compensation package for a former utility executive.
In a December 3 hearing before the state’s Department of Public Utility Control (DPUC), Blumenthal scored the payment to recently departed Energy East Chief Executive Wesley W. von Schack as a "super extravagant golden parachute," especially in light of the proposed layoffs at Energy East subsidiaries SCGC and CNG.
The DPUC has enjoined the companies from executing the layoffs until it determines the likely effects on utility service and safety. The DPUC initially forbade the layoffs in September and has extended its ban until January, when it plans to make a final decision.
The payment to von Schack stems from Energy East's acquisition by Iberdrola, a global utility company based in Spain. The deal was completed late last year.
The compensation was not a retirement payment. Von Schack was to receive his payment upon the closing of the merger, according to documents filed with the U.S. Securities & Exchange Commission (SEC). The payment included the value of vested stock and retirement plans as of the end of 2006, according to the SEC document, a proxy filing.
Said Blumenthal, who has been urging the DPUC to block the layoffs, "This $21.8 million paid to a single top executive — for leaving — is four times the amount necessary to keep all 67 employees essential to safe and reliable service.”
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