Caps on utility ceo salaries

Table Of Contents
  1. Why This Matters
  2. Policy Solution
  3. Model Policy Features
  4. Potential Limitations & Pitfalls
  5. Complementary Policies
  6. Examples
COMMUNITY BENEFITAffordability, Transparency
KEYWORDSUtility rates, utility bills
REGIONState, Federal
AFFORDABILITY STRATEGYUtility Reform: Cost Containment; Utility Reform: Accountability
OVERSIGHTState Agencies, Public Utility Commissions
POLICY MECHANISMLegislation, Regulation

Why This Matters

At the same time that utility costs are rising across the country1 and U.S. households experienced utility shutoffs 13 million times in 2025,2 the top Chief Executive Officers at investor-owned utility companies saw their incomes increase by 16% in 2025 alone, totaling $82 million.3 Moreover, utility executives’ salaries have grown by an average of 47% since 2017, outpacing inflation and wage growth. The Energy and Policy Institute has found that investor-owned utility CEOs in the U.S. were paid more than $5 billion from 2017 to 2025.4

Policy Solution

Capping the amount of executive—and utility supervisor—pay that can be recovered through charges to ratepayers reduces customer utility bills, increases corporate transparency and accountability, and potentially limits workplace inequities in executive/worker pay levels. The cap may be required by legislation or directed by a utility commission.

Model Policy Features

Key policy features that can protect ratepayers from corporate cost shifting related to executive salaries include:

  • Caps on the amount of utility supervisory salaries (including chief executive officers and other executives) that can be recovered through charges to ratepayers and that are adjusted annually and pegged to average utility worker salaries, utility commission salaries, or some other reasonable state-specific metric.
  • Prohibitions on ratepayer funding from supporting non-salary perks, such as the use of private company jets.
  • Requirements for regular and transparent reporting of utility executive and supervisor compensation levels, as well as average worker salary levels.
  • May include provisions for upward or downward adjustment of the salary cap based on whether energy affordability targets are met

Potential Limitations & Pitfalls

  • This accountability measure does not limit total executive compensation levels—since they can still be paid out of shareholder profits—only the impact on ratepayers.

Complementary Policies

Complementary policies that increase utility accountability and protect ratepayers include:

  • Utility billing transparency to ensure ratepayers have information about the costs they are being charged and to hold utilities accountable for the costs they charge to their customers.
  • Limiting utility pass-through costs to ensure that customers do not bear the costs of utility lobbying, advertising, etc.
  • Comprehensive and transparent data reporting to document that costs are being appropriately charged, benefits are reaching intended populations, and outcomes can be assessed.
  • Performance-based regulation of electric utilities to link costs recovered from ratepayers associated with executive pay to utility performance outcomes.

Examples

1. Maryland Utility RELIEF Act HB1532: Utility RELIEF (Reducing Energy Load Inflation for Everyday Families) Act

Details:

  • Limits utility supervisor compensation that can be recovered through charges to ratepayers to 110% of the maximum annual salary of the chair of Maryland’s Public Service Commission.
  • Does not limit total allowable compensation to utility supervisors, only amounts that can be charged to ratepayers.

LIMITATIONS:

  • Applies only to investor-owned utilities.
  • Part of a broader package that cuts long-term energy savings programs, such as energy efficiency, to achieve short-term affordability benefits, setting the state up for future energy affordability challenges.

2. Minnesota Xcel Energy Rate Case Docket No. E-002/GR-21-630

Details:

  • In association with a 2021 rate case, the Minnesota Public Utilities Commission unanimously voted to cap ratepayer-funded salaries for Xcel Energy’s top 10 executives at $150,000 per year each (in alignment with the Minnesota Governor’s salary) for the years 2022 through 2024.5

LIMITATIONS:

  • A bill introduced in the 2025-2026 session seeks to codify these limitations on cost recovery from ratepayers for executive salaries, but the legislation has not yet been enacted.6

Written: May 2026

  1. See, for example, Krieger, E. (2026). More Stress on Household Bills: Electricity Prices Surged in 2025. Just Solutions. ↩︎
  2. U.S. Energy Information Administration. (2026). 2024 Residential Utility Disconnections Report. ↩︎
  3. Kim. J. (2026). Utility CEO pay surges amid higher profits, customer struggles. Energy and Policy Institute. ↩︎
  4. Kim. J. (2026). Utility CEO pay surges amid higher profits, customer struggles. Energy and Policy Institute. ↩︎
  5. Minnesota Public Utilities Commission. (2026). PUC Agenda Meeting on 2026-03-12. ↩︎
  6. Minnesota Legislature. HF 76. Rate recovery of executive pay limited for certain public utilities. (2025-2026 Legislative Session). ↩︎