Transparency and Governance FAQs
Transparency and governance are more important and scrutinized topics today than ever before. Your electric cooperative is proud of its unique governance model. We strive to be a model of transparency while taking seriously our responsibility to keep the information of our members private and secure. Though often assumed to be a public entity, MTEMC is a private business that services a specific set of members.
How is MTEMC governed?
The cooperative’s members elect a Board of Directors to represent them in setting policy, approving the budget, and overseeing the strategic direction of the cooperative. Additional information on the election process can be found here. They have a fiduciary responsibility to the members, and they serve as the governing body of utility operations. Additionally, The Tennessee Valley Authority (TVA) serves as the cooperative’s regulator.
What’s the CEO’s role?
The CEO is the employee of the board and serves to execute the policies of the cooperative. As the leader of the organization, he or she employs a team to perform the purpose, vision, and mission of the cooperative.
What is the role of the members?
The staff and board of the cooperative exist to serve the members. The members are the consumers of the cooperative’s product – electricity – but they also receive the other benefits of the cooperative business model. These benefits, which are summed up in the Seven Cooperative Principles, include democratic control, education and training, and community impact.
How can members ask questions or give voice to their concerns?
As a democratically-run, member-owned cooperative, all issues are open for discussion with our membership. MTEMC is committed to operating transparently – members have the opportunity to engage with MTEMC leadership to express any concerns in multiple venues ranging from online community forums and our annual meeting to walking in the office or picking up the phone.
Can members attend meetings of the Board of Directors?
For members wishing to address the board, there is a process to go through and our staff can assist you with this request. In the spirit of member satisfaction, MTEMC management will work to address member concerns before they rise to a level that would require board intervention. Part of this intention is that if the matter should then rise to the board level, all parties will be informed and better prepared to deal with the matter. Click here to contact the cooperative’s executive office.
Are board members paid for their service?
Board members do not receive a salary, but they are compensated for their time, effort and expenses. Serving on the MTEMC board of directors requires a substantial commitment. These are not ceremonial positions characterized by minimal effort, but rather board directors are required to review, analyze, train and engage. As representatives of the membership, they set policy and approve multi-million dollar decisions, requiring numerous hours of attention and engagement per month.
Can members see the levels at which board and staff members are compensated?
Though MTEMC is a private company, the cooperative annually submits a publicly available tax form that shows compensation, as well as other important financial information about the cooperative. It is called the IRS (Internal Revenue Service) Form 990. In addition to being publicly available for inspection at our corporate office, various online sites catalog 990s, one of which is GuideStar.org.
The way Form 990 breaks down compensation is confusing… what do the columns mean?
Part VII of Form 990 lists compensation for current and former directors and key employees. Part VII, Column D lists W2 income for employees and regular monthly payments for directors. (It may also include taxable lump-sum payouts of retirement plans for retiring employees.) Part VII, Column F lists other benefits such as insurance and retirement benefits, which are not take-home pay. Also included here is the annual change in value of retirement accounts. For example, on a year when the stock market performs well, or interest rates change, this number can be significant; however, this does not represent money paid to the employee, but rather a change in the value of their retirement account for the year.
Why are the board members compensated at the level they are?
The board members are not employees of the cooperative, but they are compensated for a measure of their time and expense. Their compensation is set using thorough market analysis and data. One subset of that data is the compensation of board directors at the 15 largest electric cooperatives in the United States. While MTEMC is the second largest cooperative in the nation, board compensation is in the lower third of those 15.
Why does the board compensate the CEO at the level they do?
The role of President/CEO of Middle Tennessee Electric is one of the most critical jobs in this area, as MTEMC is responsible for providing electric power to nearly half a million people, vital public infrastructure and businesses ranging to the largest automobile manufacturing plant in North America. The CEO’s salary is set using thorough market analysis and data. Local, regional and national data is used to ensure the cooperative is able to provide competitive compensation to attract and retain a leader of the highest caliber. One subset of that data is the salaries of the CEOs at the 15 largest electric cooperatives in the United States. While MTEMC is the second largest cooperative in the nation, our CEO’s salary is in the lower third of those 15.
Are other MTEMC employees paid by the same standards?
MTEMC has made data-driven and market-based compensation a priority. A standardized employment and compensation process has been specifically designed to identify the fair market value of each position, promote fairness, and eliminate potential bias in employee compensation. Every employee of MTEMC is rewarded by and subject to this compensation process. The intent of many organizations, and certainly MTEMC, is to attract and retain high-quality employees committed to serving the membership at a high level.
What is market data, and how is it used by MTEMC to set compensation?
To determine the fair market value for each position, all positions are analyzed annually, utilizing a scientific process performed by both in-house staff and third-party consultants. This process includes analyses using an algorithm with five separate factors, including compensation data gathered locally, regionally, and nationally in both the energy industry and outside industry segments for similarly-sized organizations. Based upon these industry salary surveys and compensation studies, our employees and board of directors are compensated within market-based competitive ranges.
Where can I get additional information?
MTEMC.com is a rich resource of information ranging from the cooperative’s Bylaws to account information behind a user’s specific login. Forms, facts, and figures ranging from annual data to energy saving tips are included throughout the site. And if you can’t find what you are looking for, always feel free to contact us online, by phone or in-person.