The Group CEO of NiSource Gas Distribution and Northern Indiana Energy—whose subsidiary, Northern Indiana Public Service Company, obtained an order last year from the Indiana Utility Regulatory Commission (IURC) authorizing an electric rate hike of 16.8 percent for residential customers—earned better than 30 percent more in executive compensation in 2010 than he did in the previous year.

Group CEO Jimmy Staton earned total compensation in 2010 of $1,900,753, compared to $1,448,808 in 2009, an increase of 31 percent, according to the proxy statement filed with the U.S. Securities and Exchange Commission by NiSource Inc. earlier this month.

As NiSource spokesman Mike Banas told the Chesterton Tribune on Monday, the bulk of that increase was pegged to performance thresholds which Staton hit during the course of the year. “Jimmy Staton’s base salary increased approximately $64,000,” Banas said. “The remaining part of his total compensation is primarily for the pay-for-performance part of his compensation and included strong improvements in reliability and customer service metrics at NIPSCO and strengthened safety measures at NiSource Gas Distribution.”

Staton’s total compensation:

•Base salary: $504,167, compared to $440,000 in 2009, an increase of 14.5 percent.

•Bonus: $60,672, compared to $97,267 in 2009, a decrease of 37.6 percent.

•Stock awards: $742,949, compared to $473,896 in 2009, an increase of 56.7 percent.

•Non-equity Incentive Plan: $489,328, compared to $352,733 in 2009, an increase of 38.7 percent.

•Changes in pension value: $59,358, compared to $45,227 in 2009, an increase of 31.2 percent.

•All other compensation: $44,279, compared to $39,685 in 2009, an increase of 11.5 percent.

Banas emphasized that Staton’s brief includes more than simply NIPSCO and that, in fact, NIPSCO comprises less than one third of NiSource’s overall business. “Staton oversees nine utilities in seven states serving 3.8 million customers,” he said, including Columbia Gas of Ohio, of Pennsylvania, of Maryland, of Massachusetts, of Virginia, and of Kentucky. “His total compensation is reflective of his work across all utilities, not only NIPSCO.”

“Our pay-for-performance program rewards individuals if the company achieves certain business goals set at the beginning of the year,” Banas noted. “In 2010, we achieved or exceeded a number of key performance goals, resulting in an incentive payout for eligible employees at all levels of the company, including certain executives.” Among NiSource’s “overall successes” last year, Banas said: an increase of earnings per share of 14 percent; an increase of the company’s market value over the last two years of more than $2.2 billion; a total shareholder return of approximately 21 percent.

In addition, Banas said, Staton met certain individual performance goals as well, above and beyond the improvements in reliability and customer service metrics at NIPSCO. Those included the settlement of last year’s natural-gas rate case before the IURC; and the achievement of a “constructive result in the first NIPSCO electric rate case” before the IURC.

As it happens, NIPSCO is currently petitioning the IURC to quash that “first electric rate case” and the “constructive result” of it: an order, issued in August 2010, effectively raising the average residential household’s monthly bill from $79.57 to $92.96, an increase of $13.39 per month or 16.8 percent.

Subsequent to the IURC’s August 2010 order, NIPSCO filed a second electric rate case, seeking to trim that 16.8 percent hike to 7.9 percent or half. The latter hike would raise the average residential household’s monthly bill by around $5.94. Now NIPSCO wants the IURC to vacate its August 2010 order and expedite a new order in the second rate case.

In general, Banas noted, “compensation at NiSource remains below the average of Indiana’s 10 largest public companies for its CEO and top five highly compensated executives,” while Staton’s own compensation in particular “is well within the range paid by similar utility companies.”

Executive compensation is determined by NiSource’s Officer Nomination and Compensation Committee, with input provided last year by an outside compensation consulting firm, Exequity, whose services NiSource retained at a cost of $83,847, the proxy statement said.

NiSource President and CEO Robert Skaggs Jr. earned total compensation in 2010 of $5,767,363, compared to $4,138,377 in 2009, an increase of 39.3 percent.