In Hard Times, Postmaster Earned $800,000 in Pay, Perks; Raise Came amid Calls for Cuts in Delivery

The Washington Times (Washington, DC), February 17, 2009 | Go to article overview

In Hard Times, Postmaster Earned $800,000 in Pay, Perks; Raise Came amid Calls for Cuts in Delivery


Byline: Jim McElhatton, THE WASHINGTON TIMES

Postmaster General John E. Potter recently warned that economic times are so dire that the U.S. Postal Service may end mail delivery one day a week and freeze executive salaries. But his personal fortunes are nonetheless rising thanks to a 40 percent boost in pay since 2006, a $135,000 bonus last year and several perks usually reserved for corporate CEOs.

The changes, approved by the Postal Board of Governors and contained in a little-noticed regulatory filing in December, brought Mr. Potter's total compensation and retirement benefits to more than $800,000 in 2008. That is more than double the compensation for President Obama.

The new compensation package, much of it deferred to later years, goes beyond a newly beefed-up salary, now $263,575, that Congress arranged for him as part of a 2006 law to make top postal salaries more competitive with those in the private sector. At least four other postal officials got more than a quarter-million dollars in total compensation in 2008, according to Postal Service records reviewed by The Washington Times.

Lawmakers, already trying to limit compensation of Wall Street executives, have taken notice of Mr. Potter's good fortune when the Postal Service is posting nearly $3 billion a year in losses and now wants to raise the price of a stamp by 2 cents.

The House Oversight and Government Reform's Federal Workforce, Postal Service and the District of Columbia subcommittee will investigate during this Congress, said Marcus A. Williams, a spokesman for the panel that oversees the Postal Service.

Outside analysts also said Mr. Potter's recent vow to freeze postal executive salaries at 2008 levels means little when several got such generous compensation packages.

It's easy to freeze your pay when salaries were running as hot as a dragster the previous year, said Pete Sepp, vice president of the National Taxpayers Union, a nonpartisan group that monitors spending of the government and its spinoff agencies such as the Postal Service.

There is something to be said for attractive compensation. But at the same time, the Postal Service has a government guaranteed monopoly on the delivery of first-class mail, and UPS and FedEx don't have that. Because of that, there is a fundamental difference in the Postal Service's business model and that of package delivery firms.

In informing the Postal Regulatory Commission of its change, the Postal Board of Governors said it added deferred compensation because federal law made it difficult to pay Mr. Potter even close to a level of comparability with similarly situated individuals in the private sector.

By comparison, Frederick W. Smith, chief executive officer for FedEx, received $10.9 million in total compensation last year and $17 million in 2007, according to Securities and Exchange Commission filings.

Gerald J. McKiernan, a spokesman for the Postal Service, said the board of governors has the authority to award extra money through deferred compensation and that key congressional offices were advised of the changes.

Under federal rules, top postal officials can earn up to 120 percent of the salary of the vice president of the United States, which was $221,100 in 2008. The deferred compensation - such as bonuses, perks and substantial retirement fund contributions - are designed to augment that pay, according to postal records.

Mr. Potter isn't the only Postal Service official to benefit. Deputy Postmaster Patrick Donahoe got $600,026 in total compensation in 2008; Anthony J. Vegliante, chief of human resources, received $482,820; and at least two other postal executives got over a quarter-million dollars each, according to Postal Service records.

For the officers, enhancements to the value of their pensions totaled almost as much as their base salaries, which were under the federal pay caps. …

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