The Utah Transit Authority doubled spending on controversial bonuses for managers last year, while it sought a sales-tax hike it says is needed to restore bus service cut during the recession.
The agency spent $1.74 million on such bonuses last year, twice the $870,368 doled out in 2012, according to UTA salary data analyzed by The Salt Lake Tribune.
The biggest individual bonuses for executives rose to $30,000 each, up from $25,000. That came on top of compensation packages, including benefits, that in some cases already topped $300,000 a person.
In comparison, Utah Gov. Gary Herbert’s total compensation package in 2013 was $151,294 — less than half of some UTA executives — with no bonus included.
“The public’s perception of what goes on with UTA’s management salaries and bonuses definitely would be an impediment” to legislators allowing a UTA tax increase on the ballot, said Rep. Johnny Anderson, R-Taylorsville. This year, he sponsored and nearly passed HB388, which would have done just that.
But after hearing that bonuses doubled, he said, “It would be very tricky from a public-relations perspective to get people to buy into that” now.
Echoing that view is retiring Rep. Janice Fisher, D-West Valley City, an outspoken critic of UTA.
“Giving large bonuses will affect its credibility with the Legislature,” she said.
Ironically, “educating” the public to support such tax increases for future UTA needs is one of the goals its board set for officials to meet this year to win bonuses next year.
UTA defends bonuses as a tool to attract top talent and reward performance, and said the doubling was merely restoring a one-year cut in bonus levels made because of tough economic times. Still, the UTA board is looking at ways to change the bonus system — some of which may actually make it more controversial.
Bonus amounts • The biggest bonuses of $30,000 each went to General Manager Michael Allegra and General Counsel Bruce Jones. Those checks were paid in 2013 to reward work done in 2012.
Allegra’s total 2013 compensation was $346,249 — the bonus on top of $178,881 in wages, $49,677 for annual leave and $87,691 in benefits. Jones received $333,217 — including the bonus, $208,803 in wages, $14,032 for leave and $80,382 in benefits.
Neither was the highest-paid UTA employee. That was Paul O’Brien, who retired as the rail service general manager. His total compensation was $450,618, including a bonus of $13,870.
UTA spokesman Remi Barron said O’Brien’s pay was high because of one-time payouts at retirement for unused vacation and converting sick leave to a health care account. “He is an industry leader in rail start-ups and served UTA for 15 years,” Barron said.
Five other UTA executives received bonuses of $29,918 each.
They included Chief Operating Officer Jerry Benson (who had total compensation of $262,626), Chief Communications Officer Andrea Packer (total: $234,280), Chief Capital Development Officer William Meyer (total: $234,077), Chief Safety Officer David Goeres (total: $224,129) and Chief Planning Officer Matt Sibul (total: $219,292).
Bonuses topping more than $20,000 apiece went to three other managers, each of whom also had total compensation of more than $200,000 each.
Records show that another 21 managers received bonuses of more than $10,000 each, and all had total compensation above $100,000.
And at least another 36 managers received bonuses of more than $5,000 apiece, again all of whom had total compensation package of more than $100,000 each.
Bonus program • Barron explains how the bonus program works. The 16-member UTA board — appointed by elected officials in cities and counties throughout the transit district — set goals that managers must hit for bonuses. The board also approves a pool of money to be split among managers for this incentive pay. The pool available in 2013 for performance the previous year was $1.74 million, double that of 2012. “The pool was reduced to 50 percent in 2011, and restored to 100 percent in 2012,” Barron said. He said the earlier cut to the available funding was a direct result of the recession.
The UTA board set five major goals for 2012 that managers had to achieve to win bonuses awarded in 2013. The agency says 100 percent of the goals were met.
They included maintaining positive ridership growth; keeping construction of new rail lines on schedule; holding the taxpayer subsidy to $3.60 per rider; improving use of technology to enhance services; and working on and completing new state- and regional-transportation plans.
Barron said the incentive program “encourages employees to work hard to ensure they meet their part of the board goals and be as efficient as possible.”
“It gets everybody focused on what your goals are, and pushes that down to the rank and file,” Allegra told a UTA Board committee this week.
Criticism • Skeptics criticize bonuses for being too high and goals for being too easy.
Fisher, the West Valley City Democratic lawmaker, complained that the agency somehow found money to increase spending on bonuses at the same time officials were telling legislators it would need a tax hike to afford restoring bus service cut in the recession.
“If they have enough money to pay bonuses, that money should be put back into service first,” she said.
“Have they no shame?” said Claire Geddes, a community activist who also is a longtime UTA critic.
“When they have cut bus service and people can’t make good connections, they pay themselves bonuses. We must have stupid written all over our faces,” she said. “We shouldn’t give them another dime while this continues.”
Money spent on bonuses is a relative drop in the bucket compared to what UTA says it needs to restore and expand bus service. While the agency doled out $1.7 million in bonuses, legislative analyists say the proposed sales tax hike to restore and expand service could generate as much as $91.5 million a year.
Despite past public criticism of bonuses, UTA is taking action that could make them even more controversial.
A board committee last week reviewed how well UTA managers performed in 2013 for bonuses to be paid this year. It turns out that managers fell short of meeting two of five major goals, but the panel is proposing that managers receive most of their bonuses anyway.
For example, 20 percent of the bonus is supposed to be based on whether UTA met a goal of increasing ridership by 4 percent last year. It increased by 3.1 percent. Instead of eliminating 20 percent of potential bonuses for missing that goal, the committee proposes giving managers 15 percent anyway for meeting three-fourths of it.
The board is also expanding the controversial incentive program.
Last year, 389 UTA managers participated in the bonus program, about the same as the previous year. However, the board approved a change this year to allow nearly 800 managers to participate.
The change to include all administration employees was “an effort to further promote an agency-wide culture of exceptional performance,” Barron said, adding that UTA overhead is about 12 percent, compared to a national average of 16 percent.
“UTA is managing the public’s resources very well by running an efficient multi-modal transit system and by delivering capital projects under budget and ahead of schedule,” including 70 miles of new rail line in recent years. “This is accomplished in part because we offer competitive, market-based compensation in order to attract highly qualified people.”
2013 bonuses, compensation* for top UTA officials:
• Michael Allegra, general manager. Bonus: $30,000. Total compensation: $346,249.
• Bruce Jones, general counsel. Bonus: $30,000. Total compensation: $333,217.
• Jerry Benson, chief operating officer. Bonus: $29,918. Total compensation: $262,626.
• Andrea Packer, chief communications officer. Bonus: $29,918. Total compensation: $234,280.
• William Meyer, chief capital development officer. Bonus: $29,918. Compensation: $234,077.
• Dave Goeres, chief safety officer. Bonus: $29,918. Total compensation: $224,129.
• Matt Sibul, chief planning officer. Bonus: $29,918. Total compensation: $219,292.
For all UTA salary information, see utahsright.com.
*Compensation includes salary, bonus, paid leave, retirement and health insurance.