JEA has sent out a letter to employees to say a previously planned employee profit-sharing incentives package has been indefinitely postponed.
As JEA’s leadership team began investigating how the idea could be implemented, they decided to pull back.
“Because we are a government entity, it is something that's really never been done. And so we, the board and our compensation committee, worked with consultants to come up with a plan that will not not only be legal for government employees but also be ethical in the eyes of our customers, or in this case — constituents — because again, we're a government entity,” JEA Vice President and Chief Customer Officer Kerri Stewart told WJCT News Friday.
Stewart said Friday the idea could have been described as issuing shares of the utility to employees, although it would not have been stock in the traditional sense.
“If they felt bullish about the future of the company, and if they were going to spend another five, 10, 15 years here, and they were going to work hard to make the company financially sound and stronger in the future than it is now, then their share, their stock, would be more valuable in the future,” said Stewart.
JEA said in the letter to employees that "now is not the right time to implement the Plan based on the long-term nature of it and the potential short-term implications it could have on JEA’s strategic planning process."
Stewart stressed the decision in no way affects JEA’s existing short-term incentive plan for employees, which is called Pay for Performance.
JEA has faced an uncertain future since the board voted to explore selling all or part of the utility. Currently JEA is evaluating nine bids. That process is expected to last into spring.
If a bidder or bidders are approved by JEA’s board, a majority of City Council and voters would also have to approve a sale before it could take place.
The decision to shelve the profit-sharing idea doesn’t affect the employee bonus retention plan that was approved to potentially avoid an employee exodus while a sale is considered or executed, Stewart said.
If JEA were to be sold, all full-time JEA employees would be eligible for retention bonuses that would equal a year’s pay.
The total cost of the bonuses for the utility’s approximately 2,000 employees, which is equal to their salary, would be approximately $165 million, including $3.6 million for the 13 members of the senior leadership team.
CEO Aaron Zahn’s retention bonus would also be equal one year of pay, which in his case would be $524,000, according to Stewart.
If the utility is sold, the bonuses would be paid out over a three-year period, with a third of the bonus being paid each year.