Politics

Amtrak Rewarded Executives With Six-Figure Bonuses as Rail Service Struggled

Amtrak’s top executives received six-figure incentive bonuses in 2021, their biggest payouts in years, despite the service’s lackluster financial performance and weak ridership caused by the pandemic, according to data obtained by The New York Times.

The compensation data, obtained through the Freedom of Information Act, showed that annual incentive payouts made to Amtrak’s senior leaders have grown significantly in recent years. Nine top executives received bonuses exceeding $200,000 in the 2021 fiscal year, up from six executives in 2019. Far smaller bonuses were awarded in 2016, 2017 and 2018, and none were given in 2015 or 2020.

Last year’s payouts came as the federal government made its largest investment in passenger rail since Amtrak started operating in 1971. As part of the $1 trillion infrastructure bill that passed in November, Congress set aside $66 billion for the rail sector, a third of it specifically for Amtrak, which has for years called for greater investment to update, modernize and expand passenger rail service in the United States.

Amtrak has lost money ever since Congress created it a half-century ago to serve as the nation’s passenger rail operator. The service appeared to be on the verge of breaking that losing streak in late 2019, but the coronavirus erased that hope.

As ridership plunged early in the pandemic, lawmakers provided Amtrak with $3.7 billion in emergency relief. The rail service furloughed more than 1,200 workers, encouraged others to leave with buyout offers and paused hiring for 16 months.

Last fall, its work force was still 1,500 employees — or more than 8 percent — smaller than it was before the pandemic. The service has been hiring rapidly, but ridership this year through May was still down more than a third from the same period in 2019.

Amtrak said the executive bonuses were based on metrics such as ridership, customer satisfaction and financial performance.

Qiana Spain, Amtrak’s executive vice president and chief human resources officer, said in a statement that the incentive payments were aimed at helping the rail service “attract and retain talent.”

In order to earn incentive compensation, “Amtrak must achieve a high level of corporate performance, in support of our company’s strategic plan — and employees must also meet their individual performance goals,” she said. “The company has not made any incentive payments without first meeting its financial target.”

John Samuelsen, the president of the Transport Workers Union, whose members include nearly 1,500 service workers, mechanics and inspectors at Amtrak, said he was disgusted by the payouts.

“They gave themselves nice fat bonuses off the backs of workers that were exposed to harm’s way,” he said. “It just underscores the reason why there should be worker representatives on the Amtrak board.”

No bonuses were given in 2015, but in 2016 the rail service awarded some incentive pay to top executives. It spent no more than $500,000 annually on payouts in 2016, 2017 and 2018 as it narrowed its losses.

That changed in 2019. With Amtrak getting close to breaking even, the size of the bonus payouts to top executives nearly quadrupled, rising to a total of nearly $1.8 million, from just over $480,000 the year before. Amtrak paid no bonuses again in 2020, as the virus brought travel to a near standstill. But in 2021, it paid out $2.3 million, despite reporting its lowest revenue and biggest losses in more than a decade.

Stephen Gardner, who became Amtrak’s chief executive this year, has received more than $766,000 in short-term incentive bonuses since 2016, more than any other executive. Eleanor Acheson, the service’s general counsel and corporate secretary, was close behind, having received nearly $727,000 over that period. Amtrak declined to provide a fuller picture of how its executives are compensated, including salaries.

Of the dozen members of Amtrak’s current leadership team, all but three received bonuses of more than $200,000 last year, ranging from about $230,000 to more than $293,000 for Mr. Gardner, who was president at the time.

A spokesperson said the service increased short-term incentive payouts for managers throughout the company in 2019 to make jobs more competitive and desirable. Amtrak has no private sector counterpart, though the bonuses paid last year pale in comparison with what transportation industry executives earn. The chief executives of freight railroads, which are profitable, received millions in bonus and incentive payments last year, for example.

“I know that in all markets everyone is looking to recruit good people, but this is a bit surprising,” Patricia Quinn, the executive director of the Northern New England Passenger Rail Authority, one of Amtrak’s state partners, said of the bonuses. “I would hope that these are conversations, as state partners, we could have going forward because we all want to align our goals with Amtrak.”

Ms. Quinn said Amtrak did not discuss goal-setting and incentive payouts with its partners. And, in a January audit, Amtrak’s inspector general reported that about a third of the company’s state partners had “low trust” in Amtrak on cost-sharing issues.

The company said it created the short-term incentive program in 2013 after making changes to its pension program and closing it off for new employees joining the company.

In the 2019 fiscal year, ending in September, Amtrak customers took nearly 33 million trips with the company, a slight increase from the year before. Revenue was also up slightly, while customer satisfaction fell just shy of a goal for the year. In 2021, however, Amtrak reported only about 12 million customer trips, well below the number the year before. The service also reported its worst revenue and losses in more than a decade. Customer satisfaction was well below where it stood before the pandemic, though it surpassed a goal set for the year.

An Amtrak train in New York. The service reported its worst revenue and losses in more than a decade last year.Credit…Hilary Swift for The New York Times

Jim Mathews, the president and chief executive of the Rail Passengers Association, said Amtrak put a lot of stock into its customer satisfaction index, a measurement he takes issue with because it does not capture the full scope of the company’s performance.

Mr. Mathews said he would like to see incentive compensation tied to bringing the company back to its prepandemic level and building up from there.

“They don’t have the same tools to hand out incentives — they don’t have stock or options to make these jobs more attractive,” he said. “That said, I think these are all good jobs, and as an advocate I would really like to see these payouts not only tied to the customer satisfaction index but to the recovery scores.”

The executives have their work cut out for them. Not only is Amtrak still working to recover from the pandemic, but it also needs to prepare to put the influx of congressional funding to good use.

The company said in a report this year that the money was an “unprecedented level of funding for capital projects” and would help to modernize its fleet and stations, replace major bridges, improve reliability, expand service and replace old equipment. Rail advocates and insiders welcomed the federal spending, saying it will help to address longstanding problems and priorities for passenger rail in the United States, too.

But Amtrak’s inspector general has raised concerns about the company’s ability to hire the workers it needs to spend the new funds wisely. In a December report, it concluded that Amtrak’s human resources department lacked the leadership and staff it needed to “effectively recruit, screen, hire and onboard new employees.”

In an update last month, the inspector general said Amtrak was making progress, including by reviewing compensation companywide to ensure that salaries are competitive, but added that there was more work to do.

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