A polite tiff has broken out between the U.S. Postal Service and its inspector general over whether a pension should count in determining whether a top officer’s compensation exceeded a legal pay cap.
The officer, who was not named in the report, but whom sources identified as Paul Vogel, president of digital solutions, made a total last year of $306,250 in annual salary, pension and bonus, IG auditors found in a newly released report. That would be well above the maximum pay limit of $276,840 for USPS executives holding specially designated “critical” positions, according to the audit, which said the Postal Service is misinterpreting the 2006 law that set the cap.
USPS management begged to differ, saying that the officer’s $131,952 annual pension should not have been considered part of the pay package. According to the audit, however, the officer’s employment agreement defined “basic salary” as the pension plus a yearly salary of $113,048 for a total of $245,000. On top of that, the officer received a $61,250 performance bonus last year. The Postal Service and the inspector general’s office have agreed to seek an outside advisory opinion on the issue from the Justice Department’s Office of Legal Counsel.
“We are confident that the compensation that we paid to our senior executives did not exceed the statutory compensation caps,” USPS spokesman Mark Saunders said in an email.
For the record, the USPS Board of Governors notified Congress and the Office of Personnel Management in January that five positions–including those of Postmaster General Patrick Donahoe, Chief Financial Officer Joe Corbett and Chief Operating Officer Megan Brennan–were considered critical, according to the report. But auditors also found that the board gave three other posts the same designation without making the required notifications.
And for anyone who’s counting, the report noted that two former top USPS officials are in line for deferred executive retention bonuses well into six figures. For former Postmaster General John Potter, now president and CEO of the Washington Metropolitan Airports Authority, the balance was $786,301 as of the end of December. For former Chief Information Officer Ross Philo, the total was $642,999.
[This post has been updated with additional information.]