Mailers Council Issues Statement on Compensation for Postmaster General
ARLINGTON, VA, March 11, 2009-Today, Mailers Council Executive Director Robert E. McLean issued the following statement in response to recent comments regarding the compensation for Postmaster General Jack Potter.
“Our members, who collectively represent more than 70% of all mail in this country, strongly support the compensation system created in 2006 for senior postal managers, including the individual who holds the office of Postmaster General of the United States. We want to state emphatically that Postmaster General Jack Potter has earned his salary and the incentive pay authorized by the Board of Governors. He is unquestionably one of the most successful individuals to hold that office in the institution’s more than 235-year history. His ability to reduce costs, and eliminate more than 100,000 positions without laying off a single employee or degrading service, is both remarkable and unprecedented.
“The current pay system for all senior postal managers was created in 2006 with congressional approval. For many years before then the Mailers Council called for creating a new system with both performance incentives and higher base pay for senior postal managers. We were, therefore, pleased that the 2006 Postal Accountability and Enhancement Act gave the postal Board of Governors such a new system-and a way to attract and retain talented managers, an even more important objective today given the Postal Service’s financial challenges.
In 2003 we testified before the President’s Commission on the United States Postal Service about this issue. We noted that the statutory limit on the postmaster general’s salary had created a growing problem of pay compression among all management positions, all the way to front-line supervisors.
“This lack of pay differential makes it especially difficult to recruit first-line supervisors. But pay levels in general for mid-level and some higher-level management positions also made it difficult to convince young, talented managers to move their families from lower cost of living cities to higher cost of living ones, most notably to postal headquarters in the Washington, DC area. Many of the most qualified young managers turned down the opportunity for promotion because they could not accept what amounted to a substantial pay cut they would endure because of the higher cost of housing and other essentials in the nation’s capital.
“A related problem is the fact that pay for all managers, including highly-skilled technical positions, is below comparable positions in the private sector (and in foreign postal administrations). As a result, some employees left the Postal Service for private sector positions that pay significantly more in base salary and that include benefits unavailable to employees of any federal agency. Some managers have left as soon as they were retirement eligible, while others left before that date.
“Regarding Postmaster General Jack Potter, many news reports mistakenly reported that he earns more than $800,000 a year. That is untrue. PMG Potter received the following in current and deferred compensation:
- He earns a salary of $263,575 for managing 655,000 employees, much less than his counterparts at FedEx and UPS receive for managing much smaller organizations.
- For fiscal year 2008 he will receive deferred retirement compensation in the form of a board-approved performance-based incentive bonus of $135,041, which will be paid out in monthly increments when he retires from federal service.
- Because PMG Potter’s salary increased, his retirement or deferred compensation automatically increases based on the federal law that outlines what postal and federal employees receive upon retirement. A total of $381,496 will be added to the Civil Service Retirement Fund. He will not receive that money now or in retirement in a single payment. Instead, these additional dollars will be factored into the calculation to determine the amount of his monthly annuity when he leaves federal service.
- There is an additional payment of $77,347 included in the reported figure of $800,000 but that money does not go to PMG Potter. The overwhelming majority was given to the United States Postal Inspection Service to cover the cost of a security detail that he is required to use.
“Unlike his private sector counterparts, the postmaster general does not, and by law may not, receive such standard executive compensation items such as stock options, and cash bonuses paid while still an active employee.”
The Mailers Council is a coalition of corporations, nonprofit organizations, and major mailing associations. Collectively, the Council accounts for 70% of the nation’s mail volume. The Mailers Council believes that the USPS can be operated more efficiently, supports efforts aimed at lowering postal costs, and has the ultimate objective of containing postal rates without compromising service.