A retired veteran of Con Edison took the helm of LIPA Friday amid spirited debate during a board meeting about the process that landed him in the job.
LIPA trustees voted 8-1 to approve the unexpected appointment of John McMahon Friday afternoon. McMahon, 60, a lawyer who lives in Manhattan, spent 37 years at Con Ed, most recently as chief executive of its wholly owned Orange & Rockland Utilities company.
When the appointment came up for a vote, trustee Matthew Cordaro asked chairman Larry Waldman whether a formal search had ever been conducted that led to McMahon, whose credentials Cordaro praised.
Waldman said that since previous searches had been "unsuccessful," LIPA instead reached out to Gov. Andrew M. Cuomo's new energy czar, Richard Kauffman, "to see if he could locate someone," and he offered McMahon.
Cordaro said, "The concern I have is we didn't pursue a formal process, that suddenly a name appears from the Albany ether and we are really given very little choice." Cordaro was the lone trustee to vote against the appointment. Trustees Neal Lewis and Jeffrey Greenfield were not present.
Trustees Laurence Belinsky and Suzette Smookler both defended the process, saying LIPA has conducted previous searches and had difficulty filling the top job because of the uncertainties of the State Senate confirmation process. Cordaro noted the previous searches were for a CEO, a post that remains unfilled, not for the chief operating officer.
McMahon, who earned more than $5.2 million in total compensation at Con Ed in 2010, the year before he retired, will make $275,000 a year at LIPA. His LIPA predecessors also made $275,000 a year.
In a brief interview, McMahon said his objective was to be "an effective COO" for LIPA, and said he was coming out of retirement because "I love it," meaning the utility business.
He takes over the chief operating role, effective immediately, from Michael Taunton, who remains LIPA's chief financial officer. Because LIPA's president and chief executive function is not filled, McMahon becomes a de facto CEO. Unless he receives the actual CEO title, he will not be required to undergo a State Senate confirmation.
In addition to his new LIPA role, McMahon is chairman of Presidential Life Corp. and a director of Puget Energy Inc. He's also a manager on the board of DQE Holdings and subsidiaries that include the Pittsburgh utility Duquesne Light Co.
He takes the helm as LIPA is in the midst of an ongoing reform effort by Cuomo, who in January proposed selling LIPA's assets to a private company. More recently, Cuomo's administration has said he was open to all options, including making improvements to LIPA's already planned transition to management by PSEG. State lawmakers from Long Island have largely panned the privatization plan.
McMahon would be the third chief operating officer at LIPA in the past five months. Michael Hervey, who spent a decade at LIPA, rising to the level of acting CEO and chief operating officer, left in December in the wake of criticism of LIPA's performance during superstorm Sandy. Taunton had filled the role since January.