One other thought from today’s postal hearing. There was a lot of outrage over John Potter’s compensation package. It’s worth about $850,000, though that includes contributions to his retirement plan and his $66,000 security detail â€” he’s only taking home about half that amount.
Still, Potter earned a $130,000 bonus last year, even though the Postal Service posted a $3 billion loss. Potter said it was because the Postal Service met other goals, like customer satisfaction and workplace safety. But the bonus prompted some congressional criticism:
Rep. Stephen Lynch: Just because we’re rewarding executives at AIG… for running their companies into the ground, doesn’t mean we should be emulating them here… this defies logic to me.
Rep. Jason Chaffetz: If you have a team that keeps coming up in the red, at a certain point, you can’t be giving bonuses to the coach.
Seems to me that Lynch’s criticism is unfair. AIG went under because lots of people made really stupid bets on derivative products, and executives looked the other way (or encouraged the bets). That’s not the case at the Postal Service, where many of the financial problems stem from outside factors â€” the recession, the Internet, higher fuel prices, congressional rules and restrictions.
That leaves Chaffetz’s criticism: Do postal officials deserve bonuses when the Postal Service is posting huge losses? What do you think?