SALT LAKE CITY — Employment deals canceled in 2015 for a pair of now-former Utah Transit Authority executives were valued at more than $1.1 million each annually, according to new information obtained by the Deseret News.
The details of the 2010 compensation packages for Mike Allegra, then general manager, and Bruce Jones, then general counsel and president of governmental resources, were released by UTA in response to a records request.
Federal investigators cited concerns with UTA's executive bonuses — along with financial controls, ethical standards and transit deals — as a focus of an ongoing investigation that has already led to criminal charges against a former UTA board member.
Among the incentives for Allegra and Jones listed in the UTA summaries are a combined estimated total of nearly $850,000 in one-time bonus payments that apparently have not been previously made public.
Allegra and Jones also each received perks including automobile allowances and conversion of sick leave and vacation time to cash, as well as six-figure salaries and other bonuses.
The estimated single-year total value of the contracts if everything had been paid out "alarmed" UTA officials when it was calculated in mid-2015, UTA general counsel Jayme Blakesley said, calling them "shocking."
Seeing the big numbers was motivation "for the UTA board to quickly consider what to do with the contracts and quickly handle it," Blakesley said, by voiding the contracts for Allegra and Jones for what he termed improper execution.
Neither were paid the bonuses detailed in their contracts in 2015, Blakesley said.
For Allegra, whose salary was set at $218,498 annually in his 2010 contract, Blakesley said that meant forgoing an estimated $375,180 project bonus that was to be paid by the end of 2015, plus a $34,439 performance bonus that year.
In Jones' case, the 2010 agreement set his salary at $207,342. Blakesley said Jones was not paid an incentive bonus valued at $474,646 or a $32,681 performance bonus, nor was he allowed to earn two years of retirement for every year worked.
Utah House Speaker Greg Hughes, R-Draper, who served eight years on the UTA board — including four as chairman — before stepping down in 2014, signed Jones' 2010 contract, as well as at least two letters seeking bonuses for Jones.
Both contracts were referenced as part of UTA's non-prosecution agreement with the U.S. Attorney's Office that was signed April 4, a day before charges were filed against a former UTA board member, Terry Diehl.
A grand jury returned a 12-count indictment against Diehl — Hughes' friend and business associate — for allegedly misrepresenting in bankruptcy court more than $1 million he made on a UTA FrontRunner real estate development in Draper.
Hughes' attorney, Brett Parkinson, issued a statement after the non-prosecution agreement was announced saying Hughes was not a target of the federal investigation and had met with with federal authorities the week before.
"Out of respect for their investigation, we cannot comment further," Parkinson said then. Greg Hartley, chief of staff to the speaker, referred back to the attorney's statement when asked for comment on the contracts and bonuses.
The non-prosecution agreement states the agency faces no criminal action as long as it cooperates with the ongoing federal investigation and submits to up to three years of federal monitoring.
In an attachment to the agreement, a 10-page letter from UTA's attorneys details steps taken to address executive compensation, including voiding the 2010 contract with Allegra, as well as the 2007 and 2010 contracts with Jones.
The letter says following a 2014 state legislative audit critical of "large bonuses and special benefits" paid to its executives, UTA stopped the practice and did not pay performance bonuses or enhanced retirement benefits to Allegra or Jones.
Allegra voluntarily agreed to void his contract and signed a separation agreement in August 2015, but continued to work for UTA through March 2016 and then retired, Blakesley said.
"I frankly admire him for the way he handled this. When it was brought to his attention how a bonus of that variety might be perceived, he handled it respectfully and put the interests of the organization above his own," the UTA counsel said.
Allegra's attorney, Kathryn Pett, said in a statement he "elected to participate in an incentive bonus program in lieu of a salary increase when he was named general manager in May 2010."
Pett said Allegra "later gave up the incentive bonus in exchange for a retirement package that is consistent with the executive employment market. Mr. Allegra's distinguished record of accomplishments over his long service at UTA reflected his determination to deliver a premier transit system for the citizens of Utah."
Jones seeks bonus
Jones, however, sent a notice of claim to UTA in June 2016 seeking "all unpaid sums" from the 2010 contract, as well as one from 2007, "together with any other damages, awards, interest, attorneys' fees, punitive damages and other sums."
In the notice, he states that by February 2011 he had earned an "incentive bonus" equal to an additional year of retirement benefits for each year worked that was tied to the board naming five transit-oriented development sites with his direction.
The notice cited a Feb. 14, 2011, letter from Hughes that stated Jones had met the requirements to receive the bonus, valued by UTA at nearly $475,000, upon his retirement or in January 2016, whichever came first.
"This confirms that the incentive bonus is non-forfeitable," Hughes wrote.
According to the notice, Jones told the board in the spring of 2014 that he wanted to retire but was asked to wait first to assist with the legislative audit and then for the end of the 2015 legislative session in March 2015.
In July 2015, UTA sent Jones a letter announcing that after meeting in closed session, the board had determined his 2007 and 2010 employment contracts were void because they weren't set by the board or didn't have the necessary signatures.
"Accordingly, you will be entitled to the same retirement benefits available to all UTA employees employed for a similar length of time," the letter from Blakesley said, noting after a July 2015 vote by the board that Jones would be considered retired.
Jones told the Deseret News he is still "in discussion and optimistic of a resolution" over his unpaid benefits. He declined to talk about the details of the dispute other than to acknowledge disagreement over whether his contract was properly executed.
But Jones laughed when asked about the $1.1 million value put on his 2010 contract by UTA.
"I haven't calculated it. That exceeds by much anything that I was aware of. I can tell you this, that even after 10 years, I was making less than my predecessor," Jones said. "That's a detail that probably needs to be discussed among the parties."
The value UTA placed on his contract, Jones said, "appears to me to be very high."
But, he said, compensation is relative, and "if you go through the highest paid people in the state, you have to go through 10 or 15 pages of names before you get to UTA folks."
Jones said he has not been questioned in the ongoing federal investigation.
He said he views UTA's non-prosecution agreement "as a positive, so I would be happy to help in any way I can. But I believe I'm on the outskirts of that and would rather stay there."31 comments on this story
Although his hefty incentive bonus was contingent on UTA transit-oriented development plans being approved by the board, Jones said the transactions in Draper and other areas occurred before he oversaw such developments.
Jones, who was replaced as UTA's general counsel by Blakesley, said Hughes did not negotiate the terms of his contract.
"They were negotiated with the executive committee prior to him becoming board chairman, so he wasn't trying to look out for me in any fashion," Jones said. "He wasn't part of the negotiating. He wasn't part of, in any way, the terms."