|FOR IMMEDIATE RELEASE||CONTACT: David Holtz|
|Wednesday, March 3, 2010||(517) 999-3646|
LANSING, MI –Citizens group Progress Michigan today called on Consumers Energy CEO David Joos to abandon his campaign to raise electric rates and cut spending for schools and local communities in the wake of disclosure that he and other top executives will receive millions of dollars in bonuses this month.
Joos recently became Chair of the Board of Directors of Business Leaders for Michigan, a group of top CEOs that is advocating cuts to state revenues that will further reduce spending for schools and public services. CMS Energy, parent company of Consumers, told the Securities and Exchange Commission Monday that Joos and other top executives will receive bonuses equal to 148 percent of their salaries. For Joos and other top officers at CMS, that means more than $4 million in bonuses. Joos’ company enjoys a near monopoly position granted by the Legislature, locking in electric rates and customer base enforced by the law.
“If David Joos can raise the revenue he needs with government support to protect his profits and bonuses, then he can do the same for Michigan’s school kids, struggling families and cash-strapped local communities,” said David Holtz, Progress Michigan Executive Director. “We look forward to Business Leaders of Michigan under Joos’ leadership rolling out a 10-point plan that outlines how Michigan can offset the huge cuts in our state’s education funds by reforming our budget and revenue system and ending big corporate tax breaks. What’s good for David Joos should be equally good for Michigan’s working families, unless Lansing believes that the profits of energy companies are more important than our children’s schooling.”
Joos also wants to build a nearly $3 billion coal plant near Bay City that could raise electric rates for consumers by as much as 30 percent. Under Michigan law, Consumers is guaranteed to lose no more than 10 percent of its customer base to competitors.
“Joos runs a company that receives automatic rate increases when the price of coal goes up,” Holtz said. “But he opposes revenue increases for schools when the price of school books, energy and other costs go up. He runs a company where customers cannot leave, and if energy use goes down, he gets a rate hike to keep his overall revenues the same. But he supports charter schools and schools of choice, so students can leave a public school district and take per student spending with them. What we want are the same rules for schools and government that Joos gets from the government for Consumers Energy.”
Consumers Energy’s top five executives, including Joos, will receive about $4.1 million in bonuses for 2009 alone, which must be paid by March 15 according to the company’s SEC filing Monday. According to Business Week, Joos in 2008 received additional compensation in the form of stock that raised his total annual compensation to around $5.8 million.
In 2000, Consumers’ stock was $30 a share. Today, under Joos, it is $15 a share. Michigan’s electricity rates are also higher than Michigan’s neighbors, including Indiana, despite comparable state and local tax rates.
“David Joos and his corporate CEO friends at Business Leaders for Michigan ask others to sacrifice while they protect their fat bonuses and huge profits by sticking ordinary families with the bill and putting our families’ futures at risk,” Holtz said. “Based on David Joos’ dismal performance at Consumers, he should slash his pay and perks by at least 50 percent. The other overpaid CEOs should do the same before asking struggling families to sacrifice even more than they have and calling for more slashing of schools, services and the salaries of government workers.”