S.C. Research Authority Executives Receive Big Bonuses

October 18, 2013

Investigative Reports

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SCRA Columbia Innovation CenterSince Jan. 1 of last year, S.C. Research Authority CEO Bill Mahoney has received $108,752 in “incentive” compensation above his current annual salary of $280,000, organization records show.

And he’s not the only higher-paid employee of the little-understood, state-created technology company to receive big bonuses since the start of 2012.

The Nerve’s review of records provided by SCRA under the state Freedom of Information Act show that of 102 SCRA employees earning at least $50,000 annually, 91 received bonuses ranging from $400 to Mahoney’s $108,752 since Jan. 1, 2012. Forty employees received bonuses of $10,000 or more during the period; 16 executives, including Mahoney, were given bonuses of at least $20,000.

The average bonus among the group was $12,747. A total of $1,159,985 in bonuses was paid during the period.

Of the 102 employees earning $50,000 or more, 43 have salaries of at least $100,000, The Nerve’s review found.

SCRA officials apparently weren’t happy about The Nerve’s request for compensation information.

“Nonetheless, please do not underestimate SCRA’s commitment or resources to recover damages, should the use of this data by you or your organization lead to any cancellation or modification of any SCRA contract, reduction in SCRA’s ability to perform sensitive work for the US government or in any other way inhibit fulfillment of our lawful public mission,” said Micki MacNaughton, SCRA’s director of communications, in an Oct. 10 letter in response to The Nerve’s FOIA request.

MacNaughton’s annual salary of $122,924 was the 27th-highest in The Nerve’s review. She had the 26th-largest bonus at $15,195.

The SCRA was created by the General Assembly in 1983 “for the benefit of all the people of the State, for the improvement of their welfare and material prosperity, and is a public purpose and a corporation owned completely by the people of the State,” according to its enabling legislation. The Legislature launched the organization with a grant of 1,400 undeveloped acres and $500,000.

SCRA’s main purpose, according to the law, is to “enhance the research capabilities of the state’s public and private universities, to establish a continuing forum to foster greater dialogue throughout the research community within the State, and to promote the development of high technology industries and research facilities in South Carolina.”

SCRA reported record revenues of $266 million and record operating earnings of just over $21 million last fiscal year, which ended June 30. Much of its revenues, Mahoney told lawmakers in 2011, are derived from research and commercialization contracts with the United States military and large defense contractors, including the Boeing Co., which last December announced it was buying three SCRA office buildings near the aerospace giant’s North Charleston assembly plant.

Gov. Nikki Haley in 2011 appointed Marco Cavazzoni, a Boeing vice president, as chairman of the 24-member SCRA board, which includes the presidents of six universities and state Sen. Hugh Leatherman, R-Florence and the Senate Finance Committee chairman, who sponsored a bill last year to put himself on the board, as reported then by The Nerve.

Leatherman; House Speaker Bobby Harrell, R-Charleston; then-Senate President Pro Tempore Glenn McConnell, R-Charleston, who is now the lieutenant governor; and then-House Ways and Means Committee Chairman Dan Cooper, R-Anderson, in 2008 unveiled a “Knowledge Economy” plan – complete with a diagram of a pyramid that prominently featured SCRA near the top. At a press conference then, SCRA was tasked by the legislative leaders to act as a “facilitator and guide in expanding our Knowledge-Based Economy” through the creation of a “Knowledge Sector Council.”

SCRA is a member of the state Coordinating Council for Economic Development, made up, according to the S.C. Department of Commerce’s website, of the heads or board chairs of 11 state agencies “concerned with economic development.”  The Nerve has previously reported about secret meetings held by the Coordinating Council.

In her Oct. 10 letter to The Nerve, SCRA spokeswoman MacNaughton stressed that her organization is “NOT part of the SC State Government,” describing it instead as a nonprofit “independent enterprise corporation.”

“SCRA does not receive, nor does it seek, annual appropriations of taxpayer dollars from the SC state government,” she said. “There is no line item or proviso in the state budget regarding SCRA.”

“By law,” MacNaughton continued, “SCRA has no ability to encumber the taxation authority of the state of SC. Therefore, there are no bailouts from taxpayers for SCRA if our operations fail.”

She also said SCRA employees are “NOT employees of the state of SC.” But SCRA does participate in the state employees’ health plan, according to Angie Warren, spokeswoman for the S.C. Public Employee Benefit Authority.

And most state employees aren’t offered the types of bonuses that higher-paid SCRA employees have received since the start of last year. Following is a list of the top-10 highest bonuses paid to SCRA employees since Jan. 1, 2012, with their current salaries in parentheses:

  • Bill Mahoney, chief executive officer:  $108,752 ($280,000);
  • Julia Martin, chief officer:  $94,992 ($205,920);
  • Natalie Corella, executive vice president:  $53,346 ($161,269);
  • Marvin Davis, executive vice president:  $42,660 ($161,874);
  • Christopher Van Metre, chief officer:  $41,487 ($205,963);
  • Kevin Carpentier, senior vice president:  $40,780 ($175,436);
  • Mark Aukamp, vice president:  $32,909 ($148,721);
  • Scott Savoie, vice president:  $31,300 ($144,920);
  • Deborah Davidson, vice president:  $29,153 ($141,965); and
  • Catherine McDowell, director:  $25,756 ($140,825).

MacNaughton in her Oct. 10 letter to The Nerve noted that more than 60 percent of SCRA employees hold master’s or doctorate degrees, or professional or technical certifications, adding, “Consequently, our compensation levels are higher than typical SC workers, but at the mid-point of the industries in which we compete.”

She also disputed The Nerve’s use of the term “bonus,” contending that the labeled “incentive” compensation in SCRA records provided under the FOIA request is a “component of total compensation which the employees place at risk, based upon performance metrics established by annual operating plans approved by SCRA’s Board, comparable to any other technology services corporation.”

In a follow-up email this week, MacNaughton confirmed that “incentive” compensation was pay in addition to base salaries. The Webster’s New World College Dictionary defines “bonus” as “anything given in addition to the customary or required amount,” including “payment over and above salary given to an employee as an incentive or reward.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.