Top Dollar for Top Leaders? A Contrarian’s Viewpoint

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(from left) CPS Energy President and CEO Paula Gold-Williams, San Antonio City Manager Sheryl Sculley, and SAWS President and CEO Robert Puente.

Composite / File Photos

(from left) CPS Energy President and CEO Paula Gold-Williams, San Antonio City Manager Sheryl Sculley, and SAWS President and CEO Robert Puente.

On Jan. 28, Rivard Report Publisher Robert Rivard wrote a commentary praising San Antonio’s current crop of unelected leaders. His tone was scolding. He lectured us on how government bonds work and implied that school teachers are a fair benchmark for low wages. He told us we should “get over it” and “grow up.”

The commentary’s fundamental premise was that the bonus system currently in place for City Manager Sheryl Sculley, CPS Energy CEO Paula Gold-Williams, and San Antonio Water System CEO Robert Puente is an unnecessary distraction. He made no real comment on whether the three are paid too much or too little at this time; but he was quite clear that regardless of who is in the job, San Antonio must be prepared to pay “top dollar.”

Unfortunately, reporting and experience appear to disprove the belief that “top dollar” yields top performance. A study by professors from Purdue University and the University of Cambridge concluded the following: the more the CEO was paid, the worse the company did, and this effect was more pronounced with the highest-paid CEOs. Moreover, the longer a CEO was at the helm, the worse the company did.

The reasons given for these results could be relevant to San Antonio: overconfidence due to poor critical thinking and “cronyism” due to filling many posts with like-thinking subordinates. Sculley and Puente have been in their positions for more than 12 years and nine years, respectively; Gold-Williams is relatively new in her role as president and CEO (since 2016), but she has been an executive vice president at CPS since 2008. During their lengthy tenures, they have probably had a lot of input on who is selected for key positions, and which companies are awarded contracts and consultancies.

For a journalist, particularly in low-voter-turnout San Antonio, to suggest that interest in public leaders’ performance and salaries is an “unwanted annual distraction” is ridiculous. On the contrary, we must do everything we can to encourage San Antonians to take critical looks at the people we pay the most, the people who are responsible for our water, our power, our streets, and our safety. SAWS, CPS, and the City take hundreds of dollars from every household every single month. I think those households deserve to know where their money goes.

The commentary touts bond ratings of the City, SAWS, and CPS, and then repeats the talking points from the executives’ sales pitches. Contrary to Rivard’s assertion, San Antonio has the highest average water bill and the highest average water use of any major city in Texas. Is that great performance? Puente and other SAWS executives carefully parse words when they say that San Antonio has low water rates, but it also has the highest fees of any major city in Texas. SAWS has raised fees on the smallest meter size used for most residential connections 69 percent since 2015. That’s a recipe for bills that are difficult to lower by conserving water.

For SAWS – and for the City – doing what’s necessary for a good bond rating and low borrowing costs is a smart move, and one I’d applaud a CEO for making; but don’t claim it’s about conserving water if you’re really stabilizing revenue by raising rates. As a result, many frugal consumers saw steeper bill increases than the luxury homeowners with the pool and the vanity koi pond. The end does not always justify the means.

A little research goes a long way. Hold your vaunted “top leaders” to a high ethical standard along with their good bond rating. Puente has been called out for using bad data before. He does it because he gets away with it due to an uncritical press and a disinterested public. Is he really deserving of “top dollar” free from “annual distractions?”

Sculley, I think, does an adequate job, but her selection of subordinates for key positions is questionable. The bond ratings are a result of San Antonio’s stable revenue due to solid home values more than her actions. She and the current crop of San Antonio’s “top leaders” seem adamant on spending every penny they can extract from residents. How about a small tax rate reduction in lieu of part of that $850 million bond? Was funding UTSA athletics really necessary with citizens’ tax money?

Those low rates on bonds don’t mean much if residents have to pay more in high bills and high property and/or sales taxes anyway. How do high costs keep San Antonio “more affordable?”

I do, however, strongly agree with Rivard that the evaluation process needs to be documented and open. The mayor can fix that right now, today. Why doesn’t he?

Finally, just because Rivard likes the Council and the mayor and is a fan of government doesn’t mean politicians deserve more money than school teachers, who get an education, pursue and maintain certifications, and make real impact on the future of the city. Teachers are, by and large, underpaid for the work they do and the responsibility they bear. If they make more money than politicians, that’s probably a good thing.

 

7 thoughts on “Top Dollar for Top Leaders? A Contrarian’s Viewpoint

  1. The city’s “Evaluation Process” has been close to criminal, at least in the case of the scandalous contract with the city’s Tricentennial Commission and KSAT TV, which was secretly given without any fair competition to Phil Lane at KSAT. This gave no other a chance for the lucrative contract. When word leaked out, the city faked a competitive RFP bid “contest” just to take some heat off. (Of course, KSAT already had it in the bag.) So instead of our city getting massive exposure of the state, nation and world, instead we have only a lone forth-rate local station covering what could have been tremendous coverage (like New Orleans). KSAT alone came out on top, raking in over a million. Our city deserves better, fairer government. This is pathetic. And it’s on Sculley.

  2. Good points made in your article. In regards to Bob’s article, it goes to show you that it is difficult, even for the best journalists, to prevent their personal bias from entering their articles/presentations. I’ve observed San Antonio’s leadership up close and personal and from afar. They seem to be good people and most have the public’s best interests in mind. However, it is a city steeped in “cronyism” and, as such, I don’t think will ever become a progressive, 21st century city. I agree with Joe, changing leadership on a somewhat regular basis is good for the organization. It brings in new ideas and gets rid of the ones whose time has come and gone.

  3. Who is really running the City? I believe that the City Manager, along with business interests, run the City. I do not believe that City Council members remain in City Council long enough to learn how to influence important
    policy.

    Do City tax payers sufficiently trust the City manager and City Department heads? Is trust an important element for evaluating the performance and pay of the City Manager?

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