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The board that runs the Texas power grid approved a contract this month that would have let its chief executive earn $6,470,398 in 2027. It also voted its own members a $150,000 retention award apiece, raising average director pay about 30 percent. Within days, after Lt. Gov. Dan Patrick objected, the chief executive’s contract was left unsigned. The directors’ raise stands and takes effect October 1.
The numbers come from ERCOT’s own board materials. The agreement for President and CEO Pablo Vegas ran six years, from January 2027 through 2032, with a base salary of $1,162,716, a short-term incentive of the same amount at target, a long-term incentive of $2,092,889 at target, $53,650 in retirement contributions, a new deferred compensation plan worth $587,007, $26,421 in health and welfare benefits, and a final $1,385,000 payment owed under his 2022 contract. Set the last item aside and the 2027 package still comes to $5,085,398. The board’s Human Resources and Governance Committee recommended it unanimously on September 14, and both the board and the Public Utility Commission advanced it the next day. Then the chairman, Bill Flores, said the board would not finalize it. Vegas told The Texas Tribune the contract would not be executed and that he would stay under his current agreement.
The directors’ own compensation moved the same week. Each of the eight selected directors gets $150,000 if they serve out a three-year term, prorated for those partway through, which lifts average board pay to $219,375 from $169,375. The chairman’s retainer rises from $35,000 to $40,000. Patrick called for a reversal. “My suggestion to them is to reverse their own increase,” he said. “If they do not want to serve, I am sure there are plenty of public-service minded Texans who are willing to take their place.”
Those figures have a natural comparison, and it is the salary of the man Texans elect to run the state.
The Governor of Texas is paid $153,750 a year. The ERCOT chief executive’s 2027 package would have covered that salary 42 times over. The board chairman’s compensation is about 1.6 times the Governor’s. The average ERCOT director now earns about 1.4 times what the Governor earns. And the officeholder who stopped the CEO contract, the Lieutenant Governor, is paid $7,200 a year, the same compensation the Texas Constitution sets for a legislator.
Now set the Governor’s salary beside Washington’s pay tables, because that is the scale ERCOT is working from.
Every rung of the federal Executive Schedule out-earns the Governor of Texas. Level V, the bottom, pays $184,900 in 2026. Level I pays $253,100. The Senior Executive Service runs from $151,661 to $228,000, which puts its ceiling nearly half again above the Governor’s salary and its floor within $2,000 of the whole thing. On the General Schedule, in the “Rest of U.S.” locality, the lowest-paid locality in the country, a GS-15 at step 3 makes $157,809. Every GS-15 at step 3 or above, anywhere in the United States, is paid more than the Governor of Texas. In Houston, a GS-13 at step 9 makes $155,484. That is a mid-career federal employee, not an executive, and not a rare one: the Office of Personnel Management counts 6,596 members of the Senior Executive Service and 1,202,617 employees on the General Schedule.
Texas keeps its own grid precisely so that the people who run it answer to Texans rather than to Washington. ERCOT exists outside federal jurisdiction. That was the point. But the habits followed the function anyway. ERCOT’s directors are selected, not elected. They set their own compensation. They benchmark it against a national executive market that has nothing to do with the Texans whose utility bills fund it. That is Washington’s model of governance, imported whole and installed inside the one piece of critical infrastructure Texas kept out of federal hands.
What corrected it was not the structure. It was a phone call from an elected Texan who makes $7,200 a year and can be removed by voters in November. Accountability runs through people Texans can remove. Where it does not run through them, it does not run at all.
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