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Denver Water hands CEO, executive team another round of bonuses

Posted at 9:21 PM, Nov 03, 2017
and last updated 2017-11-04 00:48:41-04

DENVER -- Denver Water handed out another round of raises to its CEO and executive team after a Denver7 investigation into a $337,000 retention bonus the utility quietly gave the CEO earlier this year.

Records obtained by Denver7 Investigates show all ten members of Denver Water’s executive team are now paid more than $180,000 per year. Three executives received raises exceeding $22,000 – bumping their salaries up more than 12%. 

Four other executives received $10,000 bonuses.

The utility’s CEO, Jim Lochhead said he handed out the raises after the utility paid for a market survey to see how their executive team salaries stacked up with similar positions across the country. 

“Our executives were in fact significantly underpaid,” Lochhead said. “What I did is the right thing by those employees.”

“As a manager myself, I believe it is appropriate and necessary to keep good people,” said Paula Herzmark, president of Denver Water’s Board of Commissioners.

The board president also signed off on another big pay increase for Lochhead. He received a $29,400 merit bonus on top of his base salary of $330,000. 

“He is underpaid not overpaid,” Herzmark said of Lochhead. “That we underpay him is probably a crime in and of itself, but I will hold my head up high when I say that we are paying him, if anything, too little for the job he does.”

In an interview with Denver7 Investigates, Lochhead wouldn’t say if he agrees with the board president that he is underpaid.

“I’m paid what I'm paid, set by the board, and I'm passionate about my service to the community,” the CEO said.

Customers react to raises

Susan Salazar is one of Denver Water’s 1.4 million customers and she has been complaining to the utility about a recent $200 monthly bill sent to her retired father. 

“It's horrible,” Salazar said of the utility’s customer service.

When Denver7 showed her documentation of the executive team’s bonuses, she called the pay increases outrageous.

“Good Lord!” Salazar said. “They have to get the money from somewhere.”

Earlier this year, many customers let Denver Water know what they thought of the large retention bonus it handed to Lochhead. Denver7 Investigates exposed the bonus and showed the board’s only public notice of the pay increase did not include the CEO’s name, referring to him only as a “key employee.”
Several customers noticed that report – and told Denver Water what they thought in a recent survey of 16,000 customers. Comments included:

  • “Recent story by Channel 7 news on salary compensation for executive team and retreat expenditures for 2016. Lack of transparency by leadership and abuse of spending on questionable functions. Who is holding Denver Water accountable? Disgusting.”
  • “Rates keep increasing for homeowners while Denver water pays excessive financial compensation to its CEO and other executives. This is outrageous.” 
  • "Agree updating old lines must be done. Do not agree with the outrageous bonus to CEO. outrageous expense acct.” 
  • “Bonus for Denver Water CEO is not responsible cost of service.”
  • “Maybe the CEO salary should not be over $300,000 in bonus and then try and hide them.” 
  • “Stop paying high bonuses and lower rates. Criminal” 
  • “Why are there bonuses to city workers? That needs to stop. Water smells like bleach too much.”
  • “Why give that huge bonus to retain what’s his name? Use the money for rain collection barrels for us.”
  • “Everything is fine except, I am absolutely outraged by the outrageous bonus you have given to Jim Lockhead! (sic) His salary is HUGE! We use less water and get charged more and more. The increase goes to JL. And all done in secret! So sad”
  • “Bonus to CEO extravagant-could be used to diffuse the H2O costs to low income families.”
  • “Less bonuses for their management and more affordable rates for the citizens of Denver.”
  • “Stop raising the rates above inflation. Do the rate increases through the variable charges rather than through the fixed charges. Be transparent about the bonuses paid to executives.” 

“I think about sixteen comments out of the thousand reflected the issue of salary and compensation,” Lochhead said. “We're very happy with the fact that 92% of our customers are satisfied with the service that we provide.”