The San Antonio Water System Board of Trustees amended the employment contract of CEO and President Robert Puente Tuesday to increase his bonus compensation, but defer any payment for four years.
While the maximum bonus Puente will be eligible to receive in 2021 is capped at $132,500, earning it will be dependent on meeting the terms spelled out in his new contract, rather than being based on the board’s discretion.
Because the plan has a vesting period of four years, Puente must stay employed at SAWS during that entire time before he will receive a lump sum of any bonuses earned during that period.
Last month, Puente announced he would divert the $100,000 bonus he earned in 2020 to Project Agua, which provides payment assistance for SAWS customers facing financial emergencies. SAWS board members did not recommend a salary increase for Puente this year; he earned a 4% salary increase in August 2020 for his performance in 2019, bringing his base pay to $516,381.
Utility executive pay has long been a pain point for some city officials; Mayor Ron Nirenberg has long said he would like to see bonuses for municipally-owned utility officials ended.
On Tuesday, Nirenberg said he is “fully supportive” of the new amendment to Puente’s contract.
“[We want to compensate executives] in a way that’s cognizant of the pressures that they face and the ability for us to see the best talent that the industry has to offer in our community, but to do that in a way that recognizes that we are dealing with very precious and scarce public resources,” Nirenberg said. “I think that the new model, the new structure that’s been put forward, is a thoughtful and a judicious way of dealing with these pressures.”
A 2019 San Antonio Report review found that Puente was among the highest-paid public water utility executives in the U.S., with total compensation higher than the leaders of public utilities in New York City, Los Angeles, and Chicago.
Other approved changes to the contract allow the board to “periodically evaluate and increase” his salary “based on market competitiveness.”
In response to the changes, Puente said the SAWS compensation committee “worked hard” to come to an agreement that satisfied all parties.
Puente’s decision to donate his 2020 bonus isn’t the first time he has turned down bonuses or pay raises; in 2017 he declined a $96,500 bonus because he said it had become a distraction, interfering with efforts to explain why the utility needed a rate increase at the time. He also refused bonuses and salary increases in 2009 and 2010, to support SAWS employees who didn’t see wage increases in those years.
If San Antonio wants to have top-level officials running its organizations and utilities, it needs to be competitive in pay, Jamison said. People often misunderstand the talent and effort required to run a utility.
San Antonio has significant issues in the community and needs “exceptional talent” to help navigate them, she said. The best way to recruit and keep such leadership is by being competitive in pay; deferred bonus plans can help San Antonio retain its talent.
“While the board sets the metrics [for the CEO] every year, a deferred plan [also] gives us the option to look at initiatives that may take multiple years. What this board of trustees has done is, we’ve established a new target for leadership in this community,” she said.
“San Antonio has for years looked at leadership and really had a negative outlook in terms of what we’re paid, especially public leaders, and I’m saying to this community: why do we deserve less?”