The longtime CEO of the Baton Rouge-area electric utility DEMCO received a contract extension this week as outside auditors continue their probe of vendor activities and whether the contractors have improper relationships with board members.
John Vranic, who has been Dixie Electric Membership Corp.'s CEO and general manager since 2009, had another year added to his standard two-year contract Thursday night after a divided vote by the 13-member rural electrical cooperative's board.
The board voted in mid-February to open the audit after a terminated employee and an anonymous written complaint, purportedly from unnamed DEMCO employees, alleged wrongdoing by some board members and by Vranic, raising concerns about the co-op's level of debt.
Board and company officials have since said the audit is looking more toward the board members and vendor activities and noted the debt is to be expected for the level of growth in DEMCO's service area but was being paid down.Â
On Thursday night, board members did not discuss their reasons for renewing Vranic's contract, but Steve Irving, the board vice president, said Friday the vote is an indication that Vranic received a positive annual review from the board earlier this year.
"John has strong support by a strong majority of the board," Irving said.
Along with the contract extension, which included a raise, the board also approved Vranic's annual goals. Though they were not immediately available, Irving said the goals are designed to be achievable and based on "metrics" aimed at steering DEMCO toward a more modern professional corporation.Â
Vranic, who has spent most of his career at DEMCO, is the administrative chief of the 108,000-member, nonprofit co-op that serves parts of East Baton Rouge, Livingston, Ascension, East Feliciana, West Feliciana, St. Helena and Tangipahoa parishes.Â
When asked about the renewal, Vranic said Friday that operational, financial and other sectors of the co-op have been positive, and officials have recently tried to share that message with employees.
He said he wants to "let the audit run and look at it when it is finished."
Irving said the audit is being conducted by the Baton Rouge accounting and auditing firm of Postlethwaite and Netterville. The results, which will be reported to the ¶¶Òõh Public Service Commission, are expected by July, he said.Â
As a co-op, DEMCO has a fiduciary duty to its membership, who are the ratepayers, and its oversight board is elected by ratepayers living in one of 13 districts.
Before the vote on Vranic's contract, the DEMCO board met in an extended closed-door meeting Thursday during its monthly gathering at DEMCO's headquarters in Greenwell Springs. Members then came out to vote, 7-4, with members Glenn DeLee, Leslie Falks, Freddy Metz and Alice Faye Morris opposed to the contract extension.
Board President Richard "Dickie" Sitman doesn't vote unless he is needed to break a tie.Â
The board also has a vacancy. Member Joseph Self stepped down from his St. Helena Parish-based District 11 seat. Ratepayers in Self's district were expected to receive mail-in ballots by Saturday for his replacement. They are due by May 4.
Board members who opposed the contract extension either could not be reached Friday or, in the case of DeLee, declined to comment, citing a board policy also adopted Thursday night that only Irving or Sitman can speak on behalf of the board.
Irving, however, said Friday that while the policy prevents individual members from speaking on behalf of the board, it does not prevent board members from speaking as private individuals. Sitman also could not be reached Friday.
When asked Friday, Irving said that Vranic received a "decent raise" as part of the contract extension, though Irving would not say how much.
The contract details were not immediately available. In 2016, Vranic had a base salary of $330,347 plus another $89,912 in benefits to run the nearly $630 million co-op with 236 employees, according to public IRS nonprofit records and an annual audit.Â
Vranic's pay and benefits for 2016, the latest available, were 1.5 times to double the pay and benefits for the top executives of smaller ¶¶Òõh co-ops, including Washington-St. Tammany Electrical Cooperative and South ¶¶Òõh Electric Cooperative Association. They had one-third to one-half the number of employees that DEMCO had that year, nonprofit IRS filings show.
But Vranic's pay was also well below the millions of dollars in salary, stock options and other benefits that top managers received at the far larger rival Entergy Corp. in 2016, a publicly traded company with more than 1.2 million electrical customers in ¶¶Òõh alone, corporate filings show. Â