Bill Overview
Title: No Bonuses for Executives Act of 2022
Description: This bill imposes the alternative minimum tax on state regulated electric utilities that are in bankruptcy proceedings and that make incentive-based payments, other than salary, to any of their 13 highest compensated employees, and that own or lease infrastructure other than climate-resilient infrastructure (i.e., infrastructure capable of reducing the impact of major weather events and natural disasters).
Sponsors: Rep. Harder, Josh [D-CA-10]
Target Audience
Population: Customers of state-regulated electric utilities in bankruptcy and their executives
Estimated Size: 18000000
- The bill targets state-regulated electric utilities in bankruptcy.
- State-regulated electric utilities have a substantial impact on the public they serve, which implies the target population is the customers reliant on these utilities for electricity.
- The provision specifically addresses the top 13 highest-paid executives in these utilities, which directly impacts this small group of individuals.
- The employees, apart from top executives, and shareholders of these utilities might be indirectly affected due to potential changes in company financials or structure.
Reasoning
- The primary impacted group here is the executive teams of state-regulated electric utilities in bankruptcy. This is a relatively small group, given there's a specific number of highest-compensated individuals per utility, but they will experience direct financial changes due to the policy.
- The secondary impacted group is the broader base of customers reliant on these utilities, who might be indirectly affected by the policy's influence on corporate restructuring or financial practices. However, the impact there is likely sporadic and indirect.
- There's also the consideration of utility workers excluding the top executives, whose job security or compensation structures may fluctuate slightly if the companies adjust financially due to the policy. Still, the changes for them would be low-impact overall.
Simulated Interviews
Senior Executive at State-regulated Electric Utility (California)
Age: 55 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 2/20
Statement of Opinion:
- I've always believed in reasonable compensation, but bonus cuts turn our positions unattractive.
- We are facing constant scrutiny, and this policy exacerbates stress for top execs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 7 |
| Year 2 | 5 | 7 |
| Year 3 | 6 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 9 |
| Year 20 | 8 | 9 |
Middle Management at State-regulated Electric Utility (Texas)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 5/20
Statement of Opinion:
- I'm not in the top executive tier, so this policy doesn't impact me directly.
- Hoping the policy brings some financial stability back to our utility by curbing executive excesses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 8 |
Electric Utility Customer (New York)
Age: 47 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 9/20
Statement of Opinion:
- I'm worried about the utility’s ability to maintain services amidst financial adjustments.
- Any policy that can regulate executive bonuses seems fair to me, but I need stable service first and foremost.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Utility Consultant (Ohio)
Age: 63 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 3/20
Statement of Opinion:
- This policy could encourage more responsible financial management at these firms.
- From a consultant's perspective, it's a necessary intervention to align executive focus on long-term viability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Electric Utility Customer (Illinois)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- Taking away bonuses is good, but I'm more interested in seeing these utilities focus on climate-resilient infrastructure.
- The policy doesn’t address my primary concerns about environmental readiness.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 7 | 7 |
Financial Analyst (Florida)
Age: 52 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 4/20
Statement of Opinion:
- Analyzing how these policies affect stockholder value is crucial.
- Policy impacts on bonuses could lead to more equitable financial practices.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
State Regulator (Michigan)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 3/20
Statement of Opinion:
- This act aligns with our regulatory goals to ensure fairness.
- I'd expect companies to focus more on sustainable practices due to financial constraints.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Retired Electric Utility Executive (Georgia)
Age: 60 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 1.0 years
Commonness: 4/20
Statement of Opinion:
- Incentive based payments are key to maintaining top talent, cutting them affects company dynamics.
- I hope the policy doesn't deter talented execs from the industry.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
Utility Service Worker (Nevada)
Age: 32 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 6/20
Statement of Opinion:
- We're affected mostly if customer satisfaction dips due to other financial cuts or instability.
- Policy targeting bonuses may improve overall financial health if managed well.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Electricity Reform Advocate (North Carolina)
Age: 50 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 5/20
Statement of Opinion:
- This bill is a step in the right direction towards accountability, but it’s not enough.
- I advocate for more comprehensive reforms addressing infrastructure and customer protection.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $10000000)
Year 2: $5000000 (Low: $3000000, High: $10000000)
Year 3: $5000000 (Low: $3000000, High: $10000000)
Year 5: $5000000 (Low: $3000000, High: $10000000)
Year 10: $5000000 (Low: $3000000, High: $10000000)
Year 100: $5000000 (Low: $3000000, High: $10000000)
Key Considerations
- The definition and scope of 'climate-resilient infrastructure' could affect the applicability and impact of the tax.
- Enforcement will rely on consistent cooperation between federal and state regulatory bodies.
- Variations in state regulation regarding utility financial disclosures may complicate uniform implementation.