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Executive Turnover Hits SCRA

For an agency that pays extremely well, the S.C. Research Authority appears to have an extremely hard time holding on to upper management.

Since June 2010, at least eight of 12 key executives have left the company, according to a comparison of Internal Revenue Service documents and the state salary database.

The two most recent to depart are Dave McNamara and John Gregg. McNamara, formerly a senior vice president and director of SCRA affiliate SC Launch, recently left “to pursue other options,” while Gregg, who had been a senior executive vice president, retired in February to “spend more time with his family,” according to company and media reports.

It would appear that McNamara’s departure was abrupt. On Feb. 1, 2012, SCRA issued a press release touting the fact McNamara and Bill Mahoney, SCRA’s chief executive, had been recognized by a Columbia business magazine and that McNamara was also honored by Greenville business publication.

Both McNamara and Gregg brought home in excess of $200,000 annually, according to the most recent data available.

The pair joins a number of other high-ranking employees who have left the agency the past 22 months, including Gregory Frank, former chief operating officer; John Bradham, a senior vice president; and Bruce Baicar, a senior program manager.

Mahoney did not respond to calls from The Nerve this week.

The only acknowledgement of the most recent departures was a press release issued by SCRA last month announcing that Greg Hillman would serve as interim director of SC Launch, while Marvin Davis would replace Gregg.

McNamara and Gregg were among the two highest-paid officials with the Research Authority; Gregg earned a base salary of $190,100 as of August 2011, while McNamara earned $164,175, according to the state salary database.

In addition, Gregg received a bonus of $78,678 in 2010, for a total compensation of at least $268,678. Also in 2010, McNamara got a bonus of $51,274 to go with his base pay, making his total compensation at least $215,449.

The data on the pair’s bonuses came from SCRA through an S.C. Freedom of Information Act request filed by The Nerve. The 2010 information was the most recent available.

According to information filed with IRS, of the eight SCRA employees who have left the organization since June 2010, only one received less than $200,000 in compensation for fiscal year 2010. Frank earned $99,900; however, he only worked from January 2010 until June 2010.

SCRA: State-Created, State-Controlled

The Research Authority is a state-created and state-controlled technology and real estate development and management company.

SC Launch was created in 2006, while SCRA goes back to 1983, when it was chartered through legislation. SCRA does not receive direct state appropriations, but it has received government largesse over the years.

Upon its creation, the General Assembly gave the agency approximately 1,400 acres of undeveloped land, estimated at that time to be worth $10.7 million, and $500,000. Since then SCRA has received other land grants, as well.

The Research Authority is exempt from income, sales and property taxes under its enabling legislation.

In addition, SC Launch receives $6 million annually indirectly from the state in the form of contributions that are 100 percent deductible against state income taxes.

SC Launch was begun in 2006 “to facilitate applied research, product development and commercialization programs, and to strengthen South Carolina’s Knowledge Economy by creating high wage-earning jobs,” according to its website.

It provides grants of up to $200,000 to help companies bridge the gap between start-up and the point where venture capitalists are willing to invest.

Since 2006, approximately $36 million has been diverted to SC Launch through the Industry Partners Fund, money that otherwise would have gone to the state’s general fund to provide for such core services as education and law enforcement.

As of earlier this week, both McNamara and Gregg were still included among the top executives on the organization’s corporate voicemail system, and each still had an active voice mailbox.

In late March, The Nerve tried to reach McNamara through the agency’s main number. An agency operator responded by stating that McNamara was “no longer with the company.” When asked where McNamara had moved to, the operator said, “I don’t know where he’s gone.”

Pay Raises in 2010

Ironically, in September 2010, Mahoney pushed through pay raises for top executives under the guise of remaining competitive, based on the recommendation of a management consulting firm, the Philadelphia-based Hay Group.

It was later revealed that SCRA’s compensation ranking did not include the hefty bonuses handed out to executives. The Research Authority paid out more than $1.44 million in bonuses to 50 individuals for the 12-month period ending Oct. 23, 2010, The Nerve learned through a FOIA request.  

SCRA officials declined to release copies of the Hay study, saying the details could hurt the Research Authority's ability to compete, and refused to let then-chairman Bill Masters take a copy of the study home.

Both SCRA and SC Launch have been the subject of a number of Nerve stories over the past two-plus years.

Among the most recent articles was a December 2011 report that attempted to sort out questions about how SC Launch spent approximately $18 million in state money during the previous three years and a September 2011 story that looked at money SC Launch gave to a North Carolina startup company.

In the former, The Nerve filed a FOIA request seeking a breakdown of funds disbursed to SC Launch through the legislatively created Industry Partners Fund for fiscal years 2009, 2010 and 2011.

The Nerve sought specific information on the $6 million SC Launch receives annually from the fund, including to whom the money was allocated and how it was allocated.

In response, the Research Authority sent The Nerve 15 pages of information which left as many questions as answers.

The September 2011 story looked at questions surrounding funding SC Launch gave a company called NextRay Inc., founded by Dr. Etta Pisano, now dean of the Medical University of South Carolina’s College of Medicine but previously an academic at the University of North Carolina when she began NextRay.

It’s unclear whether NextRay fulfilled the residency requirement necessary to receive funding from SC Launch, or if NextRay was up front in its application about all of its “principals, founders and partners.”

Reach Dietrich at (803) 779-5022 ext. 110, or kevin@thenerve.org.

Accountability SCRA State Agencies Transparency

SC Launch South Carolina Research Authority SCRA Dave McNamara Bill Mahoney