There was a curious silence in the wake of last week’s news that CPS Energy CEO Paula Gold-Williams was awarded a $445,000 performance bonus on top of her 3 percent annual raise and a new base salary of $485,850. Her annual compensation of $930,669 dwarfs that paid to other municipal leaders now or beforehand.
I asked 5,000 friends on Facebook to share their views, pro and con, and received a total of seven comments, evenly divided for and against the performance bonus paid to Gold-Williams. Ho-hum.
There is a simple explanation for the non-reaction. Gold-Williams and other highly compensated City, public utility, and County leaders are not the target of the police and fire unions, which went to war against then-City Manager Sheryl Sculley five years ago over new collective bargaining agreements.
Union leaders succeeded in riling up many other citizens over the compensation issue, distracting people from the real issue that San Antonio taxpayers were shouldering some of the highest public safety costs in the nation, with 66 cents of every municipal dollar in the city’s general fund going to police and firefighters.
The mayor’s task force that studied public safety costs in other Texas cities in 2013 and 2014 found that San Antonio was spending more than any other major city.
The police agreed to a new contract in 2016, but the fire union has yet to come to terms. The police reserve the right to receive any compensation increase awarded to firefighters that exceeds that given in the police contract.
That union campaign against Sculley culminated last November in the charter amendment passed by voters that limited future city manager pay. Shortly afterward, Sculley announced her retirement.
Sculley earned $475,000 in her last year on the job and turned down a potential $100,000 performance bonus. Sculley’s successor, Erik Walsh, earns a base salary of $312,000, well below his peers, more in line with what city managers earn in smaller Texas municipalities like Bryan and Corpus Christi.
The unions vilified Sculley and spent significant funds over the years smearing her in television ads and on social media, yet Sculley’s 14-year tenure and performance made her one of the most recognized and successful city managers in the country. Sculley’s financial reforms and management of bond campaigns, the City’s credit ratings, and her organizational practices saved taxpayers tens of millions of dollars over her years of service, even as City services improved across the board.
Not long after her retirement, an independent consultant hired by the City to measure city manager compensation nationally found that Sculley’s total pay was in line with other big city managers and not excessive for a veteran executive leading a workforce of 9,000 civilians, 3,000 uniformed workers, and managing multibillion-dollar municipal operating and capital budgets.
Gold-Williams isn’t the only executive who has enjoyed less attention to compensation than what Sculley endured. SAWS CEO Robert Puente, who earned around $473,000 in 2018, also declined to accept a $96,500 bonus for his work in 2017. His pay has been the target of some challenges, but nothing particularly organized.
Most taxpayers would not be able to identify George Hernandez, the CEO of Bexar County’s University Health System. He is paid an annual salary of $733,000 and a $100,000 bonus, bringing his total compensation to $833,000. Hernandez’s pay has never drawn any significant protest that I can recall.
Is an annual performance bonus of almost $445,000 and a compensation package approaching $1 million appropriate for Gold-Williams? It depends on your perspective.
If you are CPS Energy trustee comparing her compensation as head of the country’s largest municipal utility, you also are looking at what CEOs at merchant utilities are paid. Private sector compensation packages are even higher.
Critics would say that is an inappropriate comparison. Sculley, for example, could have easily doubled or tripled her annual earnings by going into the private sector. It’s not realistic for taxpayer- and ratepayer-supported enterprises to compete with for-profit enterprises.
Such performance bonuses also are often described as retention bonuses, even when the departure of someone like Gold-Williams or Hernandez to a similar position in another city is deemed highly unlikely.
Finally, there is the matter of optics. All of the top executives cited in this column work in organizations that do not incentivize their workforces with annual performance bonuses, the way a company like USAA does. Should the top person be compensated for his or her performance while others in the same workforce are told excellence is expected as part of their base pay?
It’s also true that San Antonio still suffers from a legacy of low-wage jobs held by people who resent highly paid leaders in public positions. For many years our mayor and City Council members didn’t earn enough to buy lunch for a week. Many people who comment on columns like this one do not necessarily appreciate the return on investment strong executives can deliver over less competent peers. You have to pay top dollar to attract top talent.
In the end, how the public perceives executive compensation depends on the politics. The moral of the story: Don’t mess with the public safety unions.