Trump Puts TVA in Crosshairs over Labor, CEO Pay

When he joined the Tennessee Valley Authority as CEO last year, Jeff Lyash offered up a lighthearted goal in an interview: to never be "on either end, good or bad, of a presidential tweet.”

Turns out, that was too much to ask for.

Thanks to President Donald Trump, Lyash has had a head-spinning August as the head of the nation's largest public utility, created in 1933 under the New Deal to provide electricity, flood control and economic development to Tennessee and parts of surrounding states.

Trump had already been complaining about a vote to close a TVA Kentucky coal plant, which predated Lyash. Trump grumbled again in April about Lyash's compensation for running the independent agency, which makes him the highest-paid federal employee. Then an advocacy group's TV ad — aimed at an audience of one — hit its target.

The ad in July, which criticized a TVA plan to outsource 20% of its technology jobs to companies based in foreign countries — produced a Trump tweet, and soon thereafter, a White House meeting, where Trump met with some of the in-house IT workers who were set to be replaced, fired the TVA's chairman and another board member, and called for Lyash to be replaced by a new CEO whose salary would be capped at $500,000.

During that Aug. 3 meeting, Trump received a note from chief of staff Mark Meadows that said Lyash had called the White House promising to address the labor concerns. Lyash then had his own White House meeting three days later, reversing course on the IT layoffs.

“We were wrong in not fully understanding the impact on our employees, especially during the pandemic,” Lyash said in a statement after he and interim board chairman John Ryder met with White House officials. “We are taking immediate actions to address this situation. TVA fully understands and supports the Administration’s commitment to preserving and growing American jobs.”

The interim chairman also said there will be a review of the CEO's compensation, which for Lyash topped $8.1 million total in his first six months on the job.

TVA supporters like Republican Sen. Lamar Alexander of Tennessee stress that there’s more nuance surrounding the CEO’s high compensation than critics let on. The utility is funded largely by ratepayers and doesn’t use tax dollars. Federal law requires it to pay competitively with other major utilities. TVA has said its top executive compensation falls in the bottom 25% of big utilities.

Lyash's pay was blasted in the TV ad paid for by U.S. Tech Workers, an advocacy group whose message, “federal jobs should go to Americans,” meshed easily with Trump's election-year promises to keep jobs in the U.S.

“Another one of many Fake T.V. Ads, this one about the Tennessee Valley Authority, which for years has paid its top executive a ridiculous FORTUNE,” Trump tweeted in July. “Not run by the U.S., but I have long been fighting that crazy ‘salary' & its policies. Strange ad paid for (?) by ‘U.S. Tech Workers'.”

The ad "was designed to probably irritate the president when he saw it. And it did,” Kevin Lynn, who heads advocacy group, said in an interview. “And I spoke briefly with Vice President Pence following the meeting and he said, ‘You know, we talked about that ad for days.’”

The meeting made clear that Trump, who has vowed to save the coal industry, was still upset by the TVA's February 2019 vote to shutter the coal-fired Paradise Fossil Plant in Kentucky. At the time, TVA shook off pressure from Trump and Senate Majority Leader Mitch McConnell, and decided to keep retiring aging coal-fired power plants in favor of cheaper and cleaner energy sources, including natural gas.

Trump also reiterated his complaint that Lyash is “ridiculously overpaid.”

The total compensation for the CEO position in 2019 was $15.1 million, split between Lyash and the remaining work of former CEO Bill Johnson. Lyash's package includes a $920,000 annual salary and various pension and performance incentives that sweeten the deal by millions of dollars.

Trump also signed an executive order to require all federal agencies to complete an internal audit to prove they are not replacing qualified American workers with people from other countries.

Trump can’t fire Lyash himself, but he does have control of TVA’s nine board members, a power he flexed by firing chairman Skip Thompson, his own appointee, and Richard Howorth, appointed by former President Barack Obama. Thompson had already criticized Trump for floating “ill-informed opinions” about the CEO's salary in April.

Trump described the removals during the Aug. 3 meeting as a warning to other federally appointed boards.

“If you betray American workers, then you will hear two simple words: ‘You’re fired,’” Trump said.