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WASHINGTON WATCH
Big pay increases approved for top Postal Service officers
BY BILL MCALLISTER

1/22/2008

Senior Executive Pay on the Rise

Postmaster General Jack Potter and seven
other senior postal officers have received hefty
pay increases as a result of changes in the postal
reform law.
Potter got the largest increase. His salary
increases 39% to $258,840 a year, up from
$186,600. That’s an increase of $72,240 and is
now the maximum allowed a postal officer
under the Postal Accountability and Enhancement
Act (PAEA).
Deputy Postmaster General and Chief
Operating Officer Patrick Donahoe’s pay jumps
to $235,000 from $186,000, a 26% raise, under
increases granted by the Postal Service Board of
Governors.
The increases were disclosed by the Postal Service
Jan. 3 in response to a Freedom of Information
Act request.
The raises were approved by the governors in
May 2007, retroactive to Jan. 5, 2007, under a
provision of the year-old PAEA. One section of the
act removed the pay of top postal officers from
the federal pay cap. That cap requires that the pay
of most federal workers remain below the pay of
the vice president.
Citing a need to make the executive pay for
the Postal Service’s top officers competitive with
private industry, Congress voted to give the postal
governors authority to boost the pay of up to 12
USPS workers up to an amount “not to exceed
120 percent of the vice president’s total annual
compensation.”
Vice President Richard Cheney is currently
paid $215,700.
The other six postal officers and their new
and old salaries are:
• Chief Financial Officer and Executive Vice
President Harold Walker, $215,000, up from
$186,000.
•Chief Human Resources Officer and Executive
Vice President Anthony Vegliante,
$225,000, up from $183,100.
• Chief Marketing Officer and Executive Vice
President Anita Bizzotto, $225,000, up from
$183,100.
• General Counsel and Senior Vice President
Mary Anne Gibbons, $215,000, up from
$177,800.
• Senior Vice President for Operations William
Galligan, $215,000, up from $183,100.
• Chief Technology Officer and Vice President
Robert Otto, $205,000 up from $177,800.
(Otto retired Oct. 1, 2007, and has not yet been
replaced.)
Potter’s pay had been at the same level as
cabinet officers, a reflection of the days when
the old Post Office Dept. was under control of a
presidential appointee. According to the Office
of Personnel Management, cabinet officers will
be paid $191,300 this year.
In releasing the salaries, Postal Service
officials noted that in 2003 the President’s
Commission on the United States Postal Service
had called for making the pay of top postal
officers competitive with executives in private
industry.
USPS said pay of some corporate executives
who manage companies with fewer employees
than the Postal Service earn far more than Potter
will with his pay increase. Proctor & Gamble
chief executive A.G. Lafley, for example, earns
$29 million a year, USPS said.
It also noted the pay of two private delivery
firms, Federal Express CEO Frederick Smith,
who earns $8.67 million, and UPS’s Michael
Eskew, who earns $3.1 million.
USPS also compared Potter’s pay with that of
other postal chiefs. Deutsche Post of Germany
pays Klaus Zumwinkel $4 million, USPS said.
The Netherlands’ TNT Peter Baker earns $2.94
million and the United Kingdom’s Royal Mail
pays Adam Crozier, its chief executive, $1.57
million. Australia Post pays CEO Graeme John,
$1.89 million, New Zealand Post pays its CEO,
John Allen, $733,000 and Japan Post pays its
president, Norio Kitamura, $246,737 and Canada
Post pays CEO Moya Greene $483,876.
Potter’s new pay will trail that of three other
government-created organizations. Freddie Mac’s
Richard Syron is earning $11.47 million and
Fannie Mae’s Daniel Mudd $7.59 million, USPS
said. The Tennessee Valley Authority pays its
CEO, Tom Kilgore, $1.6 million, the Postal Service
said.