By government standards, the U.S. Postal Service's top executives, with their multimillion-dollar pension packages, are doing quite well. But their compensation is lagging further behind their counterparts in private industry, according to a USPS consultant.
"Towers Watson [a major management consulting firm] found that USPS executive base salaries are significantly below market when compared against published survey data of comparable jobs in the private sector," says the Postal Service's annual financial report, released today. "Moreover, the most recent assessment using 2010 data indicates that USPS executive salaries have continued to erode further over the past twelve months."
The same report says that Postmaster General Jack Potter, who is about to retire, ended fiscal year 2010 with pension benefits worth $4.4 million and received $798,418 in total compensation for the year. His successor, Deputy PMG Pat Donahoe, has pension benefits exceeding $3 million and received $481,088 in total compensation last year.
Two other postal executives also have pension packages worth more than $1 million. Because annual pay per person is capped at $276,840 annually, the Postal Service uses a variety of perks (such as spousal travel and employer-paid life insurance) and deferred incentive compensation to attract and retain top postal executives.
The annual report seems to lay to rest any ideas that Potter, who is only 55, is being forced to retire by the Postal Service's Board of Governors:
"Due to Mr. Potter's extraordinary leadership during the difficult and unprecedented economic challenges of 2010 and the results he achieved in implementing a number of process improvements that maintained service while lowering costs, his significant staff reductions, his development of a comprehensive plan to guide the Postal Service for the next decade, and his achievement of personal goals set by the Governors for the fiscal year, the Governors determined that it was appropriate to award the incentive compensation he is entitled to receive according to his contract."
Related article: Potter Quitting the Worst CEO Job in America.