Legislation Would Limit Postal Execs' Pay to $199,700

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By on March 11, 2012 in Pay & Benefits with 0 Comments

Rep. Kathy Hochul (D-NY) has introduced legislation to limit pay of executive officers of the Postal Service to the same level of pay as members of the President’s Cabinet. Pay of Cabinet members was $199,700 in FY 2012.

While almost $200,000 a year may seem like a lot, it would represent a roughly 48% decrease from the $384,229 compensation package given to Postmaster General Patrick Donahue in 2011.

Recent news announcing that the Postmaster General received a base salary of $271,871 in 2011, along with $81,954 in pension and deferred compensation and $30,404 in “other” compensation, including security costs, life insurance premiums, and parking and financial planning services for a total of $384,229 sparked calls for pay cuts to executive compensation. Add to the high salary the massive financial losses of the Postal Service (it reported a $5.1 billion loss in FY 2011) and critics were saying that the high pay was not justifiable.

Hochul’s proposed legislation no doubt comes in response to the outcries over the news about Donahoe’s compensation plan.

“The Postal Service cannot make the argument that they need to cuts costs and let go hard-working postal workers when their own management team continues to rake in bonuses and make more than the President’s Cabinet. The jobs of over 700 Western New Yorkers and thousands of Americans across this country are worth more than bonuses for a handful of individuals at the United States Postal Service,” said Hochul.

Some of the salaries of other USPS executives were also well over the $199,700 cap in the proposed legislation. In FY 2010, the annual salaries of executive officers at the Postal Service were:

John Potter
Postmaster General, CEO
Joseph Corbett
Chief Financial Officer and Executive VP
Anthony Vegliante
Chief Human Resources Officer and Executive VP
Stephen M. Kearney
Senior Vice President, Customer Relations

In 2006, a law was enacted providing senior officers of the USPS with salaries up to 120% of the Vice President’s salary, as well as authorizing bonuses for these postal executives if approved by the Postal Service Board of Governors. This legislation would change that policy and instead match the levels of pay of the President’s Cabinet.

In addition to limiting pay of postal executives, the bill would also prohibit the issuance of bonuses to USPS executive officers in years that the Postal Service closes any retail or processing facility.

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.