Kansas City, Mo ? The chairman of Aquila Inc., the struggling utility and energy trading company, defends the $10.3 million compensation he got in 2001, much of it bonus payments made this year shortly before a series of layoffs began.

Bonuses totaling about $30 million were paid to five executives in March, a month before Aquila announced that 500 employees would be fired in what became the first round of downsizing. Those cuts would save about $35 million.

The chairman, Richard Green Jr., said this week that his $10.3 million compensation reflected the company’s performance in 2001, when it was doing well.

Green spoke by telephone from Washington, where he testified before a Senate committee about energy derivatives. He said that to judge last year’s executive pay against what has happened to the company this year, when its stock has dropped to record lows, was like comparing apples and oranges.

Further, he said that part of his pay was in stock, which is down sharply. It reached a high of $37.55 in May of last year but started to decline shortly after that, first because of declining energy prices and then due to the developments that led to the much-publicized bankruptcy of another energy trader, Enron Corp.

By Feb. 1 the stock had slipped to $23.53 and on Wednesday it closed at $6.83. The number of layoffs announced by the company now total more than 1,000, and it plans to wind down its energy trading operation.

Green said he had no plans to return any of his pay, which included roughly $7.1 million in cash.

“To start a scenario where everyone starts to feel a moral obligation when they get their bonuses that they need to start thinking about giving them back is a precedent that I think would not be healthy to set for any organization,” Green said.

“Clearly, in 2002 there are not going to be those bonuses because the performance is not there,” Green said.

He said the decision to end the energy trading operation, which he had nurtured since the mid-1980s, was a “great disappointment” to him but was a reality that had to be faced.

He told the Senate committee that Aquila played by the rules but got caught up in the aftermath of Enron’s problems. Especially damaging, he said, were reports that Enron and some other trading firms had manipulated power prices in California. That was a blow to the entire industry, he said.