Georgia port officials defend top execs’ pay; critics call it excessive

Cliff Pyron, chief commercial officer: $371,466

Griff Lynch, chief operating officer: $369,613

Russ Mincey, senior director for finance: $276,742

George Hearn, senior director for trade development: $253,431

John Trent, senior director for strategic operations: $221,696

James McCurry, senior director for administration: $220,131

Robert Morris, senior director for communications $215,435

Chris Logan, senior director for trade development: $213,321

Lise Marshall, senior director for human resources: $208,905

Source: Opengeorgia.gov.

The past two directors of the Georgia Ports Authority will combine to earn $1 million in pension payments alone this year.

The state-controlled authority spent the same amount on consultants last year. And the top 10 executives at the GPA each earned more than $200,000, according to documents obtained by The Atlanta Journal-Constitution.

It’s good, highly remunerative work if you can get it at the state agency that runs the ports of Savannah and Brunswick.

Critics, though, say the pay, pensions, bonuses and consultant fees are outlandish and unwarranted at the ports, which are heavily subsidized by taxpayers. Gov. Nathan Deal, for example, labeled the pensions “exorbitant.” Others were more scathing, citing slowly rising wages nationwide and the governor’s call for another hold-the-line state budget.

“This seems incredibly excessive and shows a lack of management competence by the board,” said Steve Ellis, a maritime industry expert and vice president of Taxpayers for Common Sense in Washington. “It definitely shouldn’t be the way things happen in the quasi-public world. Privately traded companies, at least, have to answer to shareholders.”

GPA employees answer to the authority board appointed by the governor. Jimmy Allgood, the board chairman, said the pay and pensions may seem high, but “the way our port is run is absolutely unmatched anywhere.”

“We are seen as one of the top ports in the country, and everybody wants our people,” added Allgood, who founded two pest control companies in Georgia. “The GPA may be the best-run business I’ve ever been associated with, and I run a pretty damn good business. … The GPA is an economic engine for the entire state.”

Savannah and Brunswick support thousands of jobs and provide $16 billion in direct impact to Georgia’s economy each year, according to the University of Georgia. Allgood and others liken the authority to a quasi-public agency run like a private business.

Shipping lines pay the authority to move cargo in and out of Savannah and Brunswick, and those fees cover the ports’ operations. Salaries and most expenses, including the purchase of cranes and truck cabs, come from shipping-line revenue.

But the GPA, ultimately, reports to the governor. Workers are considered state employees. The ports pay no state or local property taxes. Georgia taxpayers have already ponied up $261 million of the $700 million in public money needed to deepen the Savannah River, and the Legislature spends millions more on road improvements and other capital projects that benefit the ports.

Curtis Foltz worked at the ports for a dozen years, the past six as its executive director managing 1,100 employees and the deepening project. GPA revenue rose from $267 million in 2011 to $346 million in 2016.

Foltz was richly rewarded. He resigned in June and walked away with $1,947,070 in compensation, according to documents obtained by the AJC via an open records request. His base salary last year was $470,000.

But a year earlier, according to open.georgia.gov, Foltz made $637,355. By comparison, Frank Poe who runs the Georgia World Congress Center, another state authority, earned $324,203.

And the port director in New York-New Jersey — the busiest container port on the East Coast (Savannah is No. 2) — earned $216,320 in 2014. Foltz’s counterpart in South Carolina earned $410,000.

Foltz also received bonuses this past year worth $650,000. And he got $630,000 in deferred compensation — his annual pension — via a so-called “supplemental executive retirement plan,” or SERP.

SERPs are common in the private sector, a way to reward key executives with “benefits above and beyond those covered in other retirement plans,” according to Investopedia. The GPA calculates SERP based on the W2 earnings paid an executive over the previous three years.

Foltz, 56, will receive $630,000 a year for the rest of his life. Under a typical state employee retirement plan, which factors pensions based on an employee’s 24 highest earning months, he would receive $113,000 a year.

“It’s just shocking, and I think any citizen that hears about that will be outraged,” said William Perry of Atlanta-based Georgia Ethics Watchdog, which follows government spending. “Whenever people talk about running government like a corporation there’s very little pushback on what these people are making. And when we’re investing millions of taxpayer dollars to support the ports, you’ve just got to ask, ‘Is there a better way to compensate people?’ ”

Robert Jepson, a former GPA board member and compensation committee chairman who signed off on Foltz’s pay package, said a competing port wanted to hire away Foltz five years ago and consultants found the GPA’s pay scale comparatively lacking.

“We needed some form of compensation to offset the inability to give stock options or some kind of long-term incentive program for those who made the port so successful,” Jepson said. “It’s a reasonable pension program and a reasonable incentive program and, frankly, a marginal salary given what they produce, and it all balances out well enough so we can keep the people we want.”

Foltz began a one-year GPA consultancy July 1. He’ll earn $470,000 this fiscal year, as well as his pension, advising the ports on business opportunities, the Savannah deepening and plans to build a new port with South Carolina.

Doug Marchand, Foltz’s predecessor at the GPA, is the executive director for the proposed Jasper terminal to be built along the Savannah River closer to the Atlantic Ocean. Marchand, who retired in 2009, receives $360,032 in SERP each year. In all, a dozen former and current GPA employees are enrolled in the lucrative executive pension program.

The GPA board ended the SERP in 2006 — executives employed at the time retained eligibility — and pension programs for all new employees in 2012 to “instill fiscal responsibility and limit future liability,” according to a statement from the authority to the newspaper.

“The level of compensation Curtis and others received is no longer on the table and moving forward we will balance fiscally conservative practices with the need to attract and retain the best professional staff in a highly competitive industry,” Allgood said in a statement.

Deal, who made $139,339 last year as governor, said Foltz’s SERP was put in place by “the previous administration and we were bound by contract to adhere to that.”

He added: “The new ports’ chief has nothing near that package, I’m told by the ports authority board. I think they’ve handled it, hopefully, in a way that we don’t have these kinds of exorbitant circumstances.”

Critics, though, question whether the GPA truly embraces fiscal restraint by pointing to a history of profligate spending. Marchand, for example, came under withering criticism in 2002 for racking up huge expenses, including $750-a-night stays at the Pierre Hotel in New York and golf and dining club memberships.

Marchand left the GPA at the end of 2009 and became a consultant. He currently makes $140,000 working on the proposed Jasper port, with Georgia and South Carolina splitting the tab. All consultants — including companies that undertake strategic planning, lobby in Washington and write grants — cost the GPA about $1.1 million last year.

“Public entities, in particular, have to scrutinize consultants’ use,” said Ellis, with the Washington-based taxpayers group. “They’ve already got a staff. Why is this work not done in-house? This is just manna from heaven. It certainly seems like the good ol’ boy network.”

Ellis and other critics also took issue with the big salaries paid to top GPA staffers. The ports’ Russ Mincey, for example, made $276,742 in fiscal 2015, according to open.georgia.gov. Mincey, like Sharman Lawrence with the Georgia Lottery Corp., is a top financial executive. Lawrence made $184,757.