Editorial: Metro-North's broken contract
Published 9:25 am, Saturday, April 5, 2014
Former Metro-North President Howard Permut did not receive a raise between 2008 and 2011.
Of course, most people didn't see pay hikes as the economy crumbled around them during those years. They also didn't expect to play catch-up on their salaries when the economy stabilized. And they certainly didn't count on getting a bonus representing more than 45 percent of their base salary at the end of a three-year drought.
A $98,000 bonus on top of a $215,000 salary is a pretty good payday for anyone, even someone performing at the top of their game. Former Metropolitan Transportation Authority Chairman Joseph Lhota saw fit to cut Permut that one-time check in late 2012, citing his "good performance."
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Lhota may have had good reason to reward Permut. But we can't tell because Permut's contract did not set any goals, and Metro-North declined to provide Hearst Connecticut Media reporter Martin B. Cassidy with any criteria.
There is no evidence anyone had input on the decision other than Lhota. Even if his reasons appeared sound, they should have faced scrutiny. The MTA, which runs Metro-North, lacks a compensation committee to review management raises. Connecticut doesn't even have a seat on the MTA board, where it might express the need to mend the problem. State Transportation Commissioner Jim Redeker says his agency also has no voice in the issue of compensation.
By now, the string of disasters along the line can be repeated by rote: Two trains derailed; four passengers were killed; a rail worker died in an accident and a power outage crippled the line for several days.
These events occurred after Permut's "review period," but the Federal Railroad Administration's recent report revealed a safety culture along the railroad that declined as on-time performance remained the priority.
This brings us to Permut's replacement. Joseph Giulietti's new contract also lacks goals or incentives linked to performance. He is guaranteed a base of $285,000 a year, which is $70,000 higher than Permut's. He has the potential to receive raises based on a job performance review conducted by MTA chairman and CEO Thomas Prendergast.
The salaries are in line with those of Giulietti's peers. They are hardly as bloated as the incentives received by some leaders in the corporate world, and mirror those of schools superintendents in most area communities.
We need Giulietti to get the railroad back on track. But he should not need a $100,000 carrot as a lure, and does not deserve one if he succeeds. Such a reward should not be possible in even Metro-North's finest hour. It's repulsive that the raise was awarded as commuter fares continued to rise, and events were about to demonstrate profound defects in the infrastructure and culture of the railroad.
The MTA needs a more professional process to review compensation. Safety checkpoints on the railroad were substandard, so we shouldn't be surprised there were no checkpoints to qualify for a bonus.
This is no way to run a railroad.