I have reported in the past on the corruption at Puerto Rico’s state owned electric utility, PREPA. Recently, the company was the target of outrage by the population after news came out that the chief executive was making a $450,000 salary, which is very hefty for the island, on top of his generous bonus package. To quiet the criticism, he resigned after only four months on the job.
The board promptly appointed a new CEO… and gave him a $750,000 salary. You can imagine what happened next:
The leadership of Puerto Rico’s troubled electric utility — PREPA — crumbled on Thursday, as a majority of its board of directors, including its newly named CEO, resigned rather than submit to demands by the island’s governor that the new CEO’s salary be reduced.
The board had named PREPA board member and former General Electric executive Rafael Díaz Granados as its new CEO just a day earlier, at an annual salary of $750,000. His appointment followed the abrupt resignation of Walter Higgins, who had served as CEO for less than four months and announced his departure Wednesday amid a cloud of controversy over his own $450,000 salary.
But news of Díaz Granados’ even larger salary sparked an outcry among politicians, including Puerto Rico’s governor, who was traveling to Russia to watch the World Cup final.
On Thursday morning, Gov. Ricardo Rosselló demanded the resignation of any member of PREPA’s board unwilling to cut Díaz Granados’ salary, which Rosselló called “not proportional to the financial condition of PREPA, to the fiscal situation of the government, or to the feeling of the people who are making sacrifices to raise Puerto Rico.”
It was a dizzying 24 hours at the already troubled utility, which is bankrupt and $9 billion in debt, has churned through a succession of leaders in the 10 months since Hurricane Maria destroyed the electric grid last fall, and is still struggling to restore power to all of the customers who lost it after the storm.