Two state senators have asked Maryland Attorney General Douglas F. Gansler to investigate executive pay at Constellation Energy Group and whether CEO Mayo A. Shattuck III's compensation package amounts to an unlawful waste of assets shouldered by customers.
Noting the national backlash against "excessive" executive compensation, Democratic Sens. Jamie Raskin of Montgomery County and James Brochin of Baltimore County asked Thursday for a legal opinion on whether Gansler or any government official has the authority to void pay arrangements for Shattuck, or whether the General Assembly can restrict his pay.
"It seems like excessive greed for a public utility," Brochin said. "I promised constituents I would do everything in my power to ensure oversight over their utility bills."
Constellation, the parent of Baltimore Gas & Electric Co., reacted strongly. Spokesman Robert L. Gould called the senators' request "unprecedented" and said that federal securities law dictates that executive compensation should be decided by shareholders and the board of directors. He noted that the board rejected bonuses for top executives last year because of poor performance.
"This is a puzzling and disturbing vendetta against a single company and a single individual, and one has to ask, 'What is this the start of and where are they going with it?' " Gould said. "Will the senators soon be targeting anyone who is successful in Maryland's private sector?"
Shattuck's pay has been a source of controversy as BGE's electricity rates have risen in recent years. Gov. Martin O'Malley has harshly criticized Shattuck's compensation recently as he has sought concessions from the company, including rate discounts.
O'Malley's office and Constellation officials had been in settlement talks as the company is seeking regulatory approval for a deal to sell half its nuclear assets to Electricite de France. Disputes over that transaction are now before state regulators and in Baltimore Circuit Court.
Gansler spokeswoman Raquel M. Guillory said the attorney general would look into the matter.
Shattuck's pay totaled $15.7 million last year, including salary, stock options and other benefits, according to the company's most recent proxy statement.
The state senators criticized a number of contractual payouts that amount to millions of dollars, taking particular exception to the way the board's compensation committee counted Shattuck's service as a director before becoming CEO toward his supplemental retirement plan's tenure requirement.
That means that Shattuck becomes eligible earlier for an estimated $33 million payout. He must be 55 years old with at least 10 years of service to qualify, regulatory filings show. Because of the additional service time credited, Shattuck had accumulated 9.7 years as of Dec. 31, according to the company's latest proxy statement. He turns 55 in October.
According to the statement, the change was made as a result of negotiations with Shattuck, who gave up other benefits related to long-term disability payments.
