(The following article by Mark J. Konkol was posted on the Chicago Sun Times website on December 3.)
CHICAGO — Even as it begs state lawmakers for more transit cash, Metra is paying its top three executives bonuses that boost their salaries by as much as 20 percent.
The commuter railroad’s bosses have been getting the bonuses annually since 1996, and the Metra board will decide later this month how fat this year’s checks will be.
Last December, the Metra board went behind closed doors to top off executive director Philip Pagano’s $198,900 salary with a $40,000 bonus, a single payment that rivals a train conductor’s $51,000 starting salary and made Pagano one of the country’s top-paid transit executives.
Tops mayor, gov, CTA boss
Pagano’s $238,900 in salary and bonus payments put him ahead of Mayor Daley, CTA boss Frank Kruesi and Gov. Blagojevich, who make $203,800, $197,750 and $150,691, respectively.
The Metra board also decided last year to add a $35,000 sweetener to deputy executive director Richard Tidwell’s $178,500 salary, according to documents obtained by the Chicago Sun-Times.
Pagano made the call to increase chief operating officer Vaughn Stoner’s $144,660 salary with an $18,500 bonus. Pagano said Stoner, who reports to Tidwell, deserved a 13 percent bonus for his “work effort and all sorts of things.”
The bonuses have raised eyebrows, including those of Metra board member James Dodge, who plans to call for an internal review of how bonuses are doled out.
That’s a topic sure to come up at the agency’s Dec. 17 meeting, the same day the Metra board is expected to consider Pagano’s and Tidwell’s annual bonus payments in executive session.
Performance pays
Metra bosses started getting bonuses in 1996, with “one-time” payments for exceptional performance while keeping fixed-salary costs low, Metra Chairman Jeff Ladd said.
Metra payroll records show that since 1996, Pagano, Tidwell and Stoner have cashed $588,500 in bonus checks, sometimes on top of base-salary increases. And those bonus payments count toward their pensions, a Metra spokeswoman said.
Salaries and bonuses for both Pagano and Tidwell increased 42 percent over the eight-year span, at a rate of more than 5 percent a year. And Stoner, who didn’t receive a bonus payment in 1996, saw his salary increase 36 percent during that same period.
Ladd defended the bonuses, saying Pagano, Tidwell and Stoner are underpaid for the work they do to keep Metra financially afloat and running on time.
“[Giving bonuses] is commonplace in private industry. It may be exceptional in government, but we always try to run Metra as a business rather than a government agency,” he said. “I submit . . . they are underpaid based on what other people around the country are getting for similar positions.”
In fact, Pagano makes more than the heads of transit agencies in New York City, Washington, D.C., Philadelphia, Pittsburgh, Miami and Atlanta, according to a survey published in the October edition of Metro Magazine, a transit trade publication.
Nearly all of Metra’s 479 management employees received bonuses last year, most getting checks equal to about 3 percent of their salaries, according to payroll records.
Biggest bonuses
But the biggest bonuses were reserved for Pagano, Tidwell and Stoner, who along with Ladd have remained together atop the Metra hierarchy since the commuter rail system’s 1984 inception.
The practice of paying double-digit bonuses to executives is unique to Metra among Chicago area transit agencies.
At the CTA, neither Kruesi nor his top three deputies get end-of-year bonuses.
Pace executive director T.J. Ross has never received a bonus in addition to his $162,232 salary. Deputy executive directors Melinda Metzger and Terrance Brannon, who were paid $131,818 and $145,226, respectively, last year, did receive 3.8 percent bonuses in 2003, a Pace spokesman said.
The American Public Transit Association says using bonuses is not unusual to retain top managers.
Still, RTA board member Donald Totten said the RTA should take a closer look at how Metra pays its executives.
“Giving bonuses isn’t uncommon, but [20 percent] seems a bit high,” he said. “We can’t force them to do anything so long as they comply with having a balanced budget. But we can yell and scream at them, which is what we should do.”
Dodge, who was appointed to the board in March, said: “This is an issue we will be looking at closely with what’s going on with all the challenges of funding for public transit.”
Whether or not Pagano and his top deputies deserve a bigger paycheck doesn’t matter, Cook County Commissioner Liz Doody Gorman (D-Orland Park) said.
“No matter how they justify it, this is difficult for the hard workers who take the train to stomach,” she said.
“If they can justify it so much, why not incorporate that into the base salary. These are hard times where it’s hard to justify any bonuses.”