Sam Penrod, Deseret News
In an effort to rebuild trust that has been lost in recent years due in part to criticism surrounding executive pay, the Utah Transit Authority board of trustees Wednesday approved a plan to restructure how administrators are paid.

SALT LAKE CITY — In an effort to rebuild trust that has been lost in recent years due in part to criticism surrounding executive pay, the Utah Transit Authority board of trustees Wednesday unanimously approved a plan to restructure how administrators are paid at the state’s largest transit agency.

The changes were based on information from a report conducted by the Employers Council, a Salt Lake City-based nonprofit employers’ association. The council reviewed UTA’s total compensation and benefits program for its administrative nonunion employees comparing the agency’s base pay, variable (bonus) pay and employee benefits to the programs offered by UTA’s “relevant” labor market which was defined as transit, government and nonprofit organizations.

The UTA board of trustees requested the report, which detailed information on the overall competitiveness of UTA's total compensation program. The analysis began in August 2014 and was completed in eight months.

The report defined the relevant labor market as “the companies with which an organization competes for employees, usually peer companies in the same industry, companies within its geographic location or companies of similar size” — i.e. revenue, operating budget and assets. If the compensation was within market norms, it was within the range of 15 percent above or below the labor market median, the report explained.

The results from the review were reported in four separate employee groups, including all administrative employees, executives and regional general managers, general counsel as well as the president and CEO.

Among the key findings, the report found that base pay for administrative employees was found to be within market norms. However, all employees’ base pay was below the average of the labor market median by 5 percent in 2014, explained Monica Whalen, the Employers Council president and CEO. Health and retirement benefits were within market norms, while paid leave fell below the norm, she said.

The report also stated that executive base pay was at the labor market median for 2013 and 2 percent above in 2014, but overall within market norms, while average base pay for regional general managers was 2 percent above the labor market median in 2013 and 2014 but also within market norms. The base pay and benefits for the general counsel position, along with CEO Michael Allegra were within the market norms as well, according to the report, Whalen said.

Last April, a performance audit of the Utah Transit Authority was conducted to review policies and practices at the agency. The comprehensive report showed numerous instances of questionable business practices, concerns about UTA’s plans for transit-oriented development and questions regarding the salaries and bonuses of the agency’s management team.

The audit mentioned the particularly high earnings of UTA executive staff, indicating that the agency’s executive team earned 49 percent more in total compensation than the Utah Department of Transportation's nine highest earners.

Seven of the agency’s top nine earning executives — all of whom made between $142,236 and $228,558 — received at least $29,918 in bonuses in 2013. Two others received $24,233 and $10,471, respectively.

Following the audit, UTA made immediate changes with respect to benchmarking and reporting, and conducted a compensation survey of comparable transit agencies to present to the full board. Past studies show that UTA executive salaries were at or below the median when compared to its peer agencies, explained H. David Burton, chairman of the UTA board of trustees. But he acknowledged that public perception regarding the agency and its management has been less than favorable based in part on the amount its management received in salary and bonuses.

“UTA has been plagued with adverse publicity relative to compensation, whether deserved or not,” he said. “That has been on the public conscience for a number of years.”

He said the board’s decision to perform a thorough review of administrative and executive pay was a positive step in regaining public trust in the agency. He noted that the decision to commission this latest report was made prior to the release of the most recent legislative audit, not in response to the audit.

“The board, well before the audit was even announced, had started this process,” Burton said.

Allegra noted that, at the time, UTA had expanded its incentive program to all 750 administrative employees — not just executive management levels — and incentive awards were significantly reduced for executives and top managers. In fact, the board of trustees amended its policy to require any incentive award greater than $8,000 be reviewed and approved by the board in a public meeting, he said.

In 2014, UTA’s bonus program was modified to reduce the payout amounts and establish a maximum payout of $7,500, said report co-author Kimberly Barton, Employers Council human resources adviser and compensation manager. In 2015, the program was further modified to set the maximum payout at 4 percent of base pay not to exceed $7,500, she said.

The agency will continue to conduct annual market reviews and in 2015 will include both base pay and bonus pay to enable UTA to compare its total cash compensation and expand the survey sources to include additional nonprofit and government data, Barton said.

“We want the public to know that we have a financial plan that is very conservative (and) we have people who are qualified to perform the task of running a multibillion dollar (agency),” Burton said. “(We have) a compensation plan that is fair and equitable to the employee and to the taxpayer. In every possible way, the board is monitoring and attending to the business at hand.”

He said the board takes very seriously its charge to oversee the affairs of the agency.

“If you look at the composition of our board, you will find to the man or woman, people of great integrity, great reputation (and) great experience,” he said. “I’ve served on a lot of boards, none stronger than this one.”

Allegra noted that moving forward the agency would make every effort to instill trust and accountability in the way it operates.

“The essence of everything we’re doing here is to make sure that there is confidence in the public that our job is to deliver and provide the highest quality of service,” Allegra said. “We want to make sure that all those decisions and all those processes that we have in play to deliver that (service) are open, available and transparent for the public’s best good.”

===================================================

Recent salaries for UTA's top executives

Michael Allegra, president/CEO

Wages (including vacation and sick leave): $228,558 (2013); $229,597 (2014)

Incentive award: $30,000 (2013); $0 (2014)

Total compensation (including health, retirement and life insurance benefits):

$399,621 (2013); $367,608 (2014)

Bruce Jones, general counsel, retired (Jayme Blakesley was sworn in as new general counsel on March 25)

Wages (including vacation and sick leave): 222,835 (2013); 218,891 (2014)

Incentive award: $30,000 (2013); $0 (2014)

Total compensation (including health, retirement and life insurance benefits): $382,221 (2013); $339,562 (2014)

Jerry Benson, chief operating officer

Wages (including vacation and sick leave): $174,534 (2013); $178,031 (2014)

Incentive award: $29,918 (2013); $7,500 (2014)

Total compensation (including health, retirement and life insurance benefits): $307,466 (2013); $292,723 (2014)

Clair Fiet, chief technology officer

Wages (including vacation and sick leave): $158,316 (2013); $161,468 (2014)

Incentive award: $24,233 (2013); $7,500 (2014)

Total compensation (including health, retirement and life insurance benefits): $282,369 (2013); $272,426 (2014)

Bob Biles, chief financial officer

Wages (including vacation and sick leave): $168,461 (2013); $171.846 (2014)

Incentive award: $10,471 (2013); $7,500 (2014)

Total compensation (including health, retirement and life insurance benefits): $273,719 (2013); $280,759 (2014)

Andrea Packer, chief communications officer

Wages (including vacation and sick leave): $165,671 (2013); $168,983 (2014)

Incentive award: $29,918 (2013); $7,500 (2014)

Total compensation (including health, retirement and life insurance benefits): $277,685 (2013); $258,165 (2014)

William Meyer, chief capital development officer

Wages (including vacation and sick leave): $149,525 (2013); $152,514 (2014)

Incentive award: $29,918 (2013); $7,500 (2014)

Total compensation (including health, retirement and life insurance benefits): $273,469 (2013); $256,767 (2014)

David Goeres, chief safety officer

Wages (including vacation and sick leave): $144,243 (2013); $147,550 (2014)

Incentive award: $29,918 (2013); $7,500 (2014)

Total compensation (including health, retirement and life insurance benefits): $262,504 (2013); $245,937 (2014)

Matthew Sibul, chief planning officer

Wages (including vacation and sick leave): $142,236 (2013); $145,069 (2014)

Incentive award: $29,918 (2013); $7,500 (2014)

Total compensation (including health, retirement and life insurance benefits): $256,203 (2013); $239,235 (2014)

E-mail: [email protected]

Twitter: JasenLee1