As South Carolina’s budget woes have worsened over the past couple of years, many state agencies have cut back, leaving unfilled positions vacant, curtailing raises and, in some cases, laying off employees.
But while it’s been a virtual trip down Tobacco Road for some state agencies, the good times don’t seem to have slowed down a bit at the S.C. Research Authority.
Already among the best-paid employees in state government, some SCRA executives took home rather impressive bonuses during fiscal year 2009, the most recent data available.
- In addition to Chief Executive Bill Mahoney’s salary of $218,521, the SCRA’s top dog received bonus and incentive compensation of $92,582, other reportable compensation of $14,685, deferred compensation of $24,821 and non-taxable benefits of $11,486. That works out to total compensation of $362,095, according to information found in the agency’s Form 990 filing, submitted to the Internal Revenue Agency.
- Robert Kiggans, the then-chief operating officer of SCRA, received a salary of $154,751, along with bonus and incentives valued at $63,674, other compensation worth $45,335, deferred compensation of $20,775 and non-taxable benefits of $5,345. His total earnings for FY 2009 were $289,880.
- Chief Financial Officer Julia Martin pulled in more than $140,000 in salary, and also received bonus and incentives worth $54,435, other compensation valued at $15,278, deferred compensation of $18,503 and non-taxable benefits of $14,719. Her total for the year was $243,655.
- John Gregg, executive vice president and general manager, got a bonus of $50,715 to go along with his $146,580 base salary. His total compensation for FY 2009: $254,961.
- David McNamara, the director of SCRA affiliate SC Launch, earned $126,009 in base salary, and also got a bonus of more than $50,000. His total compensation for the year in question was $204,359.
In all, the above individuals earned a total of more than $310,000 in bonuses alone during the fiscal year ended June 30, 2009. That works out to an average bonus of 39.6 percent per person.
None of this would be known to the average South Carolinian, however.
For while SCRA, a state agency begun in 1983 with a gift of $500,000 and 1,400 acres of state land from the General Assembly, has to make public the salaries of all employees who earn more than $50,000 annually, it doesn’t have to include such items as bonuses and other forms of compensation.
And even the information found in Form 990 filing lists just a handful of executives – fewer than a dozen. SCRA employs approximately 240 individuals in all.
The SCRA is a state-created and controlled technology and real estate company. Acting much like a general contractor, the Research Authority specializes in forming partnerships to commercialize scientific and technological research.
The SCRA also is a key player in efforts by the state and some local governments in South Carolina to develop a “knowledge-based economy.”
In mid-November, The Nerve filed an S.C. Freedom of Information Act request with the Authority for details on all bonuses paid to executives of the agency and its affiliates between Sept. 30, 2008, and Nov. 19, 2010.
Mahoney responded to the FOIA request on Dec. 14, writing that “the compensation data you have requested is under review and will be addressed in the normal course of SCRA business.” The Nerve has received no other information from SCRA besides what was in the agency’s 990 filing.
Mahoney did not respond to interview requests for this story.
The question of bonuses took on particular importance this fall when a controversy arose over SCRA plans to dole out hefty raises, despite the dire condition of the state’s budget.
On Sept. 30, the Research Authority approved a proposal to enact a largely across-the-board 6.5 percent pay increase for its 240 employees, an event reported by The Nerve and other media outlets.
Days later, though, Mahoney backtracked, claiming the media erred in its reporting.
According to a letter Mahoney sent to SCRA employees, salary adjustments were calculated for 97 employees – rather than for all SCRA employees – and those increases ranged as high as 9 percent.
However, The Nerve videotaped the meeting in question, which showed SCRA board Chairman Bill Masters asking Mahoney directly, “What percent raise are we talking about giving out? Is it across the board or weighted toward one group?”
Mahoney tells Masters the increase will be approximately 6.5 percent across the board for all employees for the first year, and, if approved, nearly 20 percent total over three years.
The salary boost stems from a recommendation of management consulting firm, Philadelphia-based Hay Group. According to the Hay Group, the Research Authority ranks in the 25th percentile among peers in terms of what it pays.
To remain competitive, SCRA should raise its compensation so that it’s much closer to the 50th percentile, the Hay Group reported.
However, SCRA’s compensation ranking does not include the hefty bonuses handed out, Masters has said. SCRA officials have declined to release copies of the Hay study, saying the details could hurt the agency’s ability to compete.
In fact, Masters has said he was not allowed to keep a copy of the Hay Group study, either. He reviewed it during a SCRA Compensation Committee meeting, but management would not let him take it with him to review afterward, he told The Nerve.
The pay raises rankled some observers given the shape of the state’s budget.
General funding for state agencies has been reduced by an unprecedented amount – more than $1.6 billion – amid the Great Recession.
Earlier this month, outgoing Gov. Mark Sanford’s released a non-binding 2011-12 budget plan that calls for cutting by 5 percent the pay of state workers earning more than $35,000 a year. Those state workers also would have to take two unpaid furlough days.
South Carolina’s federal stimulus funding from the American Recovery and Reinvestment Act of 2009 is running out this year. Largely because of that, state officials are projecting up to a $1 billion gap in the 2011-12 spending plan before legislators even start drafting it.
Even without bonuses and raises, almost half of all SCRA employees currently earn $50,000 or more annually; fully 90 make $60,000 or more; 36 bring home $100,000 or more; and 10 earn in excess of $150,000, according to The State’s salary database.
And the base salaries of the individuals listed above (or, in Kiggans’ case, the individual who replaced him), have nearly all grown by double digits in terms of percentages between the end of fiscal year 2009 and August 2010.
By comparison, annual income for the average South Carolinian is less than $32,000, according to University of South Carolina economists Doug Woodward and Joey Von Nessen.
In addition, the controversial salary increases recently passed were scheduled to go into effect before the end of 2010 and likely won’t show up in the state salary database for some time.
And while SCRA gets no direct state appropriations, under the S.C. Industry Partners Act, South Carolina taxpayers can receive a 100 percent credit against state income taxes, insurance premium taxes and certain license fees for contributions.
Last year, $6 million was contributed to SCRA affiliate SC Launch through this means.
Reach Dietrich at (803) 779-5022, ext. 110, or firstname.lastname@example.org.