- The Washington Times - Tuesday, November 16, 2010

Outgoing U.S. Postmaster General John E. Potter earned nearly $800,000 last year - an increase of more than $60,000 over the previous year - as the U.S. Postal Service faces the worst financial crisis in its history.

Mr. Potter’s salary is capped by statute at $273,926, but like other top Postal Service executives, he’s also eligible to receive additional money through special incentive compensation to be paid out in later years. The incentive compensation netted Mr. Potter $228,000 for fiscal 2010. He didn’t take any incentive money last year and received $135,041 in 2008.

Mr. Potter retires effective Dec. 3 after 32 years with the Postal Service and nearly a decade as postmaster general. His salary and incentive bonus payment, coupled with $219,000 in pension and other earnings, brought his overall compensation package to $798,000, records show.

Citing Mr. Potter’s “extraordinary leadership during the difficult and unprecedented economic challenges of 2010,” the Postal Service Board of Governors said in a recent regulatory filing that “it was appropriate” to award him $228,000 in incentive money.

The governors also cited “the results he achieved in implementing a number of process improvements that maintained service while lowering costs, his significant staff reductions, [and] his development of a comprehensive plan to guide the Postal Service for the next decade.”

The Postal Service said in filings that the postmaster’s compensation still lags behind the pay of other chief executives in the private sector.

But watchdog groups question the payouts after the Postal Service announced more than $8 billion in losses for fiscal 2010 and is seeking permission to cut a day of mail delivery to save money.

“How can they do this at a time like this?” said Leslie Paige, a spokeswoman for the nonpartisan Citizens Against Government Waste. “There’s some sort of major disconnect there.”

Pete Sepp, vice president of the National Taxpayers Union, said postal customers will look at two bottom lines: compensation and annual losses. “For the sake of good PR alone, it may might make sense to revise the compensation system for manager so the performance and reward at least look like they’re more directly related to each other.”

But Postal Service spokesman Gerald McKiernan pointed to language in the regulatory filing this week where the agency’s Board of Governors said it gave Mr. Potter incentive compensation because of his “extraordinary leadership during the difficult and unprecedented economic challenges of 2010.”

Mr. McKiernan also said Mr. Potter declined incentive compensation in 2009.

While Mr. Potter’s personal fortune’s rose, his successor, Patrick R. Donahoe, the deputy postmaster general and chief operating officer, overall earned $481,088 for 2010, including a base salary of $247,615. By comparison, his overall compensation was $597,129 in 2009 and $600,026 in 2008.

Upon his retirement, Mr. Potter also has an executive pension plan worth $1.35 million, which was part of a contract and based on Mr. Potter’s “attainment of required performance objectives” from June 2001 to June 2007, according to filings.

In addition, Mr. Potter has an annuity, reflecting his 32 years with the Postal Service, that could be worth more than $3 million, records show. Mr. Potter also is entitled to receive $243,978 in accrued annual leave.

• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.

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