USPS Continues To Fail As Head Chief Earns $384,000 Annually


The United States Postal Service is currently in the process of cutting $15 billion in expenses while the man tapped to make those cuts is earning $384,000 annually. Postmaster General Patrick Donahoe is currently earning a base salary of $271,871 plus an additional 81,954 in pension and deferred compensation. Donahoe also receives $30,404 in other compensation that includes life insurance premiums, financial planning services and security costs.

In the meantime Senator Jon Tester (Dem. Mont.) has decried U.S. Postal Service salaries in a letter to top officials this week. In his letter he asks that top postal executives cut their own salaries and bonuses as they continue to shut down processing centers and layoff tens of thousands of workers.

Tester says executives should be willing to take pay cuts as executives from other private companies have done in the past in order to gain “favorable treatment from Congress.” However as Tester writes:

“To date, not a single executive has offered to forgo bonuses or reduce his salary during this difficult time.”

According to a recent report all U.S. Postal Service executives receive a base salary of at least $200,000.

Currently at stake is the closure of 200 postal processing centers and the loss of 32,000 USPS jobs. USPS officials have also proposed a price hike that will place the cost of sending a first class letter at $.50 cents.

Despite executive bonuses and pay levels the United States Postal Service lost $5.1 billion in the year ended. Sept. 30.

In defending the high salaries of USPS executives a senior executive at the postal service pointed to higher compensation offered to executives in similarly sized private companies operating in the delivery field.

According to agency spokesman Mark Saunders:

“When you compare the size and scope of an organization that employs well over half a million employees operating among 32,000 locations linked by more than 210,000 vehicles, our officer compensation is well below that of similar private-sector positions.”

What Mr. Saunders failed to recognize was the profitability of those other organizations. For example UPS reported $3.8 billion in profit during the 2010 fiscal year and paid D. Scott Davis $10.7 million during that time period to run the organization.

In comparing executives from the USPS to other governmental workers Secretary of Defense Leon Panetta earns $199,700.

Not all blame for the company’s financial issues can be placed on USPS executives, for example the government’s pension plan and health care policies cost the company billions of dollars annually despite low revenue.

Do you think the USPS should force top executive pay decreases based on horrendous performance standards at the organization in recent years?

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