In the United States, the highest-paid public employees are college sports coaches. For example, Mel Tucker signed a decade-long extension last November to continue as the head coach of Michigan State University’s football team for a salary of $9.5 million per year. In contrast, Michigan’s governor, Gretchen Whitmer, receives an annual salary of $159,300. However, major university athletic programs generate enough revenue to justify a seven-figure salary somewhat. It’s more difficult to justify Amtrak’s chief executive officer being paid more than the President of the United States. It’s even more close to impossible to argue that an Amtrak executive should receive a bonus worth more than half their salary.
The New York Times recently reported that nine executives at Amtrak each received bonuses of over $200,000 during the 2021 fiscal year. Amtrak CEO Stephen Gardner was paid a bonus of $293,000 in 2021 while he was the company’s president. According to the Wall Street Journal, Amtrak’s previous CEO, Bill Flynn, had an annual salary of $475,000 before retiring in 2022. The for-profit passenger railway corporation owned by the federal government has stated that bonuses are essential to “attract and retain talent” at the company. Amtrak also said that bonuses are based on performance metrics like ridership and revenue.
While the bonuses are performance-based, there is dissatisfaction with the corporate structure that allowed this to happen. John Samuelsen, the Transport Workers Union president, said, “They gave themselves nice fat bonuses off the backs of workers that were exposed to harm’s way. It just underscores the reason why there should be worker representatives on the Amtrak board.”
It’s unclear precisely what criteria are used to determine bonuses at Amtrak. Ridership is still down a third of what it was before the pandemic. Most of the company’s staff were furloughed during the pandemic’s early peak, and the company is still struggling to hire enough workers to return to pre-pandemic staffing levels. Amtrak has received an $8 million federal grant for a worker training program to ease the issue.
This is the unique dilemma of Amtrak being a state-owned business that provides a service vital to many across the country. It should be able to provide executive compensation competitive with the private sector, but not at the expense of the workers who keep the service running.