Pay Top Dollar to Top Leaders, Lose the Public Sector Bonuses

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City Manager, Sheryl Sculley discusses the approved city budget. Photo by Scott Ball.

City Manager Sheryl Sculley speaks with members of the media following a City Council meeting.

City Manager Sheryl Sculley has proven to be one of San Antonio’s smartest investments over the last decade, but Mayor Ron Nirenberg and City Council should make this year’s $75,000 bonus her last one.

CPS Energy Chairman Ed Kelley and the CPS board should do the same and make the $290,000 bonus paid to CEO Paula Gold-Williams last August her last one.

And SAWS Chairman Heriberto “Berto” Guerra Jr. and the SAWS board should make the $99,285.71 bonus approved last August for CEO Robert Puente his last one.

Public servants serve the public. Service to taxpayers and ratepayers, not a bonus, should be their incentive. Public servants, even the top ones, never earn what they could earn in the private sector. That’s usually fine because the best public servants have a calling to their professions.

That said, our city’s many low-pay advocates should get over it. Good leaders deserve good pay. If we want top leaders in our city and if we have aspirations for San Antonio to become a city of choice for companies creating smart jobs, we better hire and retain strong public sector leaders into the top positions. That means paying top dollar.

Bonuses, however, have proven to be an unwanted annual distraction, a compensation method imported from the private sector that works poorly in the public sector, especially in instances where only the top executive gets a bonus. Everyone else? Tough luck.

San Antonio’s top public leaders should be paid nationally competitive salaries that negate the need for bonuses. Nirenberg and City Council should order up and review national data, as they are doing, to make sure our top executives are paid in line with their peers. After that process is completed and shared with the public, contracts should be adjusted  or renegotiated to pay the executives a competitive salary and benefits package. If that means paying Sculley, whose compensation happens to be in the news right now, $525,000 a year instead of $450,000, then do it without apology.

Holding her or any other public sector executive accountable is another matter. Nirenberg should do what past mayors failed to do: put in place a professional process for setting goals and evaluating performance.

That gives the mayor and council the opportunity every contract cycle to base salary increases on performance. If an executive underperforms, a salary increase can be reduced or eliminated. If matters are even worse, make a change in leadership. Eliminate the annual bonus argument.

Populist opposition to good pay for top executives misses the point. Certainly, highly compensated, poorly performing executives deserve all the negative attention they get in the media. But coverage of high performing top executives often fails to measure the value they bring to their organizations. When that “organization” happens to be municipal government or a public utility, the smart, even visionary decisions good leaders make can save taxpayers tens or even hundreds of millions of dollars over time.

Wouldn’t you invest a few hundred thousands of dollars to turn that into millions?

The return on investment in human capital is not always easy to quantify. If you live in San Antonio, you have the highest bond rating of any major city in the United States, which means you pay the lowest interest rates on public debt of taxpayers anywhere. It means investors see the City of San Antonio, CPS Energy, and SAWS as strong and safe  investments. They buy our bonds.

We use the revenue from those bond sales to build a better city, to broaden our energy portfolio through investments in more sustainable systems, to diversify our water supply, and to build safer wastewater infrastructure. That, in turn, is how we attract jobs and build a bigger tax base, which makes servicing the debt on those bonds even easier for the city and its taxpayers. San Antonio taxpayers not only pay low-interest rates on municipal debt, metro area residents and businesses have some of the least expensive and most reliable supply of energy and clean water in the nation.

All of this adds up to higher quality of life in San Antonio, and keeping the city more affordable than others. None of that happens by accident. It happens because of vision and strong leadership demonstrated over sustained periods of time.

City Councilman Greg Brockhouse (D6) has been especially vocal in opposition to Sculley and her recently approved bonus. Last week he noted that the bonus exceeds the annual income of a family of four in San Antonio. So what? We do not want the head of the average family of four serving as the chief executive officer of the city. We want the strongest, most experienced leader in municipal government we can find and afford. And one challenge for leaders like Sculley is to pursue economic development and urban management strategies that raise the annual income of that average family of four.

San Antonio has that person. Pay Sculley what she is worth, and stop comparing her compensation to the average man or woman. She is accountable for a multibillion enterprise. There is nothing average about her.

Here’s the good news for Sculley, Gold-Williams, and Puente, and any other public official in San Antonio who has a compensation package that include bonuses. If you are paid a fair and equitable base salary, you will only see your salaries in the news once a year. All that news coverage of bonus deliberations will go away.

If we want to have an important discussion about paying our public officials in San Antonio, I would suggest this: Let’s amend the City Charter and pay San Antonio’s mayor and council members nationally calibrated salaries like those paid in other leading cities. Council members here earn less than the lowest paid, first-year school teacher. The mayor earns less than any local nonprofit head.

Grow up, San Antonio. The way to build leading edge cities is to find the best possible leaders and let them lead. Pay them what they deserve. The payoff is immeasurable.

 

22 thoughts on “Pay Top Dollar to Top Leaders, Lose the Public Sector Bonuses

  1. Great post. I agree that the optics are bad when bonuses only go to the top person when their success is based on the performance of everyone below. The best leader and/or manager is worthless without good followers and workers.

    • What did Elizabeth Warren say…. exactly that… no one gets there on their own, spread the wealth.

      “There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

      • Wow, spoken like a true socialist. Who uttered the line “You didn’t build that”? Hmmm…Next, let’s experiment with everyone making the same wage regardless of input/output or investment. Then maybe, juuusst maybe, after a few generations we can all live together in teepee’s holding hands and singing Kum ba yah in open fields dancing over rainbows…oh never mind!

  2. Thanks Bob for this article. Extremely good points here. This is particularly egregious when public servents who work under these people are underpaid AND cannot receive the alcolades that they deserve because their raises are tied inextricably to their evaluations. We need to celebrate these folks for good work but what about the scaffold below them?

    • Great examples of where The Rivard Report can do some investigative journalism and expose the good and the bad within those organizations.

  3. In your article you note that the Council earns less than a starting teacher. So what? We do not want agenda-driven demagogues teaching our students. We want the strongest, most experienced educators that we can find and afford.
    They work harder, do a better job, and are more important to the future than the Mayor or Council members. They’re required to have an education; the Council is not. They’re required to maintain proficiency; the Council is not.
    People choose where to live because of good schools, not because of well-paid city staff or a good bond rating. Good teachers create good schools, they create the future. Industries select cities with an educated workforce; teachers create that workforce.
    If we want to have an important discussion about paying people what they’re worth, I would suggest this: Let’s pay San Antonio’s teachers salaries like those paid to the SAPD. Teachers here earn less than the lowest paid, first-year police cadet.
    Grow up, Bob. The way to build a leading edge populace is to find the best possible teachers and let them teach. Pay them what they deserve. The payoff is immeasurable.
    (Sound familiar? You had a good argument going for a while. Right up until you joined Brockhouse in an irrelevant comparison. No, the Council and Mayor do not deserve a pay raise simply because they earn less than a ‘school teacher.’)

    • You had me right up to the point where you told Bob to “grow up”. That comment was an unnecessary jab in an otherwise interesting post.

      • Re: missing the point and unnecessary jabs.

        ‘So what?’ and ‘Get over it’ and ‘grow up’ were all Rivard’s. I merely borrowed them, along with his tenor, structure and logic.

        An observant critic might even accuse me of plagiarism, and I would agree with him or her. Three of my paragraphs are Rivard’s words, nearly verbatim, with minor substitutions.

        Perhaps you should re-read the original commentary?

  4. Telling it like it is Robert. Sad to come back to my hometown after four decades and see the cronyism and of total mismanagement in City of San Antonio government. Who signed off on all of this? How did it get to this point? Sound like Nawlins.

  5. I agree with most all of what is said in your article. What The Rivard Report could do is provide more in-depth coverage of what our major city entities do well and what they need to improve upon. I’m sure if you dug deep enough you would uncover some waste and abuse (hopefully no fraud) in the operations of these organizations. Let’s expose the good and the bad along with comparing their salaries to others in similar positions. Let’s hold these public organizations accountable for the dollars they spend. You could start with an update on the Vista Ridge project.

  6. Dear Bob,
    Thanks for your thoughtful info and article.

    It raised the tenor of the discussion to a higher road!

    Tommy

  7. Thank goodness for the Rivard Report. Bob, your perspective is always welcome and hopefully will begin conversations of change.

  8. Sculley’s record will be forever stained, so long as the scandalous and shameful crooked contract between her Tricentennial Committee and KSAT TV exists. Phil Lane conspired with the committee to secretly lock down the lucrative city contract that excluded all other media sources to cover the 300th anniversary of our city. When the under-the-table contract was leaked, they scrambled to fake a competitive bid contest, which of course had alredy been rigged. Two Tricentennial Committee chairs were bounced, but Sculley stayed, and more importantly, the crooked contract was allowed to stand.

  9. Thank you, Mr. Rivard, for this insightful article! We certainly need to pay our Mayor and City Council what they are worth, just as we should do for other key officials. It seems that the word “bonus” hits a nerve with us, the public. We want people to have good salaries because their performance is high. Somehow the word “bonus” has italics and flashing lights around it, making us feel that they are getting too much. Whereas a competitive salary for a job well done doesn’t push the same buttons. I appreciate your analysis.

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