This article has been updated.

CPS Energy’s board of trustees unanimously approved a 13.2% raise for the utility’s President and CEO Rudy Garza Monday, the first raise Garza has received since officially taking up the position in September 2022.

This brings Garza’s total salary up from the $655,000 per year he was originally contracted for to $742,000 per year. The trustees also approved a deferred retention payment for Garza of up to 10% of his base pay per year “to be held and deferred to the conclusion of” Garza’s current contract on Jan. 1, 2026.

This new “deferred compensation” package mirrors the one San Antonio Water System has had in place for its President and CEO Robert Puente since 2021. Garza previously did not receive any sort of annual bonus, although the utility did leave the door open for the possibility of a bonus pay structure when hiring Garza into his new role. 

He was the first CPS Energy CEO whose compensation did not include incentive or at-risk pay based on meeting certain metrics at the publicly owned utility. CPS Energy ended its executive bonus program in 2020, canceling $13 million in bonuses that would have gone to 1,800 employees at the beginning of the pandemic. 

The utility’s trustees decided to postpone approving which metrics will be used on Garza’s annual scorecard until next month, with Trustee John Steen asking to have more time to review the options. 

According to a report by the Energy and Policy Institute, CEOs at investor-owned utilities across the country earned anywhere between $1.5 million and nearly $40 million in compensation in 2019. 

Trustee Willis Mackey made this point prior to the board’s vote on Monday, noting Garza’s salary is “a fraction of the average for CEOs” in similar sectors and similar-sized utility companies. Garza’s new salary is now at the median for municipal CEOs based on their base salaries, said CPS Energy’s Senior Director of Corporate Communications and Marketing Amy Lane. 

Steen said while he supports the raise for Garza, he is dissatisfied that CPS Energy did away with the at-risk pay and would like to see it brought back. Steen credited the removal of this pay for CPS Energy’s low retention rate for its C-suite over the last couple of years, a point that Chair Janie Gonzalez disputed. 

“Our top executives expect to be paid close to what their peers in the industry are paid,” and when they’re not they depart for greener pastures,” Steen said. “In recent years, we’ve lost seven of our eight highest-ranking executives. The only one that remains at CPS Energy today is Rudy Garza.”

“Seven C-suite executives are no longer here, but those were self-selected resignations,” Gonzalez argued. “This was not something that we forced on them, they chose to resign.”

Prior to 2020,CPS Energy’s salaried staff’s compensation included a bonus component, based on whether performance metrics were achieved company-wide.

In 2019, after reading the San Antonio Report’s two-part investigative series on executive compensation at CPS Energy and the San Antonio Water System, Mayor Ron Nirenberg called for an end to the bonus system at the city-owned utility.

Executive pay in local public sector jobs was a hot-button issue in San Antonio at the time. That year, then-CPS Energy CEO Paula Gold-Williams brought home just over $930,000, which included her roughly $485,000 base salary. The rest was bonus pay.

Nirenberg’s wish to see the end of bonus pay for CPS Energy executives was realized when the pandemic hit. The utility was about to pay out roughly $13 million in bonuses to employees, including the at-risk portion of Gold-Williams’ pay. These bonuses were put on hold indefinitely after the city ordered CPS Energy and SAWS to stop disconnecting customers during the height of the pandemic.

While disconnections resumed in October 2021, CPS Energy never reinstated bonuses for its salaried employees. SAWS employees also do not receive any sort of annual bonus but can get performance based raises when the SAWS budget allows for it.

Garza told reporters following Monday’s board meeting that CPS could potentially bring back bonuses. Garza said he’s discussed “some type of program that incentivizes performance as a component of compensation” with the board, but he’s still talking with employees about what makes the most sense for them.

“The worst thing you can do is create an incentivized system that doesn’t incentivize, so there’s a reason why we haven’t bought it back,” he said.

CPS Energy is a financial supporter of the San Antonio Report. For a full list of business members, click here.