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UTA execs may get bonuses even for missed goals

Published May 8, 2014 1:28 pm

Bonuses • Close is good enough to get partial credit under recommendation.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

A Utah Transit Authority board committee decided Wednesday not to be quite as generous as previously proposed with controversial, big bonuses for agency executives.

But, as with horseshoes or hand grenades, it decided that simply being close to the goal — despite missing the actual target — is good enough for executives to receive a partial financial reward.

That comes after The Salt Lake Tribune reported last month that in 2013, UTA doubled its spending on bonuses at the same time it was seeking a sales-tax hike to restore bus service cut during the recession. Top UTA executives were paid up to $30,000 each in bonuses, with their total compensation packages topping $300,000.

Earlier in April, the UTA Board's Finance & Operations Committee initially recommended being even more generous with this year's bonuses.

For bonuses that will be paid this year, UTA executives had to hit five major goals last year — with 20 percent of their bonuses depending on whether each target was hit.

UTA missed two of those major goals, putting 40 percent of the potential bonuses at risk.

One goal was to increase ridership by 4 percent, but it rose by only 3.1 percent.

The other goal was for UTA to hold its tax subsidy per ride — which it calls "investment per rider" for costs not covered by fares — to $3.52 or less. Instead, the subsidy was pegged at $3.69, about 5 percent higher than the target.

Last month, the committee had recommended that because UTA achieved 75 percent of its increased-ridership goal, executives should receive 75 percent of the possible bonus in that area. Similar partial credit would be given for the missed "investment per rider" goal.

The committee forwarded that recommendation to the full UTA Board. But after publication of The Tribune story on bonuses, the board's executive committee returned the recommendation to the finance committee for further review.

Under a change proposed by chairman Chris Bleak, the committee now recommends giving no credit for the missed goal on increasing ridership — but two-thirds credit on the "investment per rider" goal.

Overall, under the revised recommendation, executives would be paid 73 percent of the total bonus possible for hitting three major goals and hitting two-thirds of a fourth goal.

The full UTA Board is expected to vote on that proposal May 21.

One critic of UTA bonuses was unappeased by Wednesday's revised plan.

"It hardly seems appropriate to spend our money to reward performance that went from poor to slightly less poor," said Connor Boyack, president of the Libertas Institute, a libertarian-leaning policy institute that opposes UTA tax subsidies.

"It's troubling that so much tax money would be thrown at executives in a quasi-government enterprise such as UTA," he said. "You would never see this kind of behavior in the marketplace, but it's not surprising to see our tax dollars mismanaged in this way."

The agency paid out $1.74 million on bonuses last year, twice the $870,368 doled out in 2012. But the agency says it merely restored a 50 percent cut in total bonuses from the previous year because of a tough economy.

The biggest individual bonuses for executives rose to $30,000 each, up from $25,000. For example, $30,000 each went to UTA General Manager Michael Allegra (who had total compensation, including benefits, of $346,229) and UTA General Counsel Bruce Jones (whose total compensation was $333,217).

UTA has defended the bonuses as helping do such things as recently finish building 70 miles of new rail line years early and hundreds of millions of dollars under budget.

UTA Board Chairman Greg Hughes, who is also a GOP state legislator, and board vice chairman H. David Burton, former presiding bishop for the LDS Church, wrote an opinion column for The Tribune defending the bonuses.

They said the board "is proud the agency finished 2013 $6.7 million under budget and produced $2.2 million in increased efficiencies. The performance-based compensation program helped the agency achieve such savings."

The three major goals UTA did hit last year included meeting on-time completion of new rail projects, meeting non-tax revenue goals, and completing or moving forward as projected on a variety of regional transportation plans.

The full UTA board made some modifications to the bonus policy last month. It now requires that any bonus over $8,000 not required by contracts must receive board approval in an open meeting. It also required board approval for any international travel by UTA officials, which has also been controversial.