Dozens of executives received more than $10,000 apiece in bonuses on top of annual salaries of more than $150,000 each.
Executives and managers at the Port of Seattle received the bulk of the $4.8 million in Port bonuses that the state auditor has deemed illegal, with some of the biggest payouts going to the senior leadership team that rolled out the bonus program.
The Port on Tuesday released a list of names of about 650 employees who got a one-time payout in December 2015 that equaled 7 percent of their salary.
The list shows that about 360 senior personnel with “manager” or “director” in their job title received more than $3 million of the total $4.8 million doled out.
Among those who got especially large bonuses were port CEO Ted Fick, who resigned this month; and the human-resources director, chief counsel and other executives responsible for helping oversee the program.
The Port had previously said only that nonunion workers got the money and that it was designed to attract and retain employees.
The state auditor this month said the bonuses violated two parts of the state constitution because the money — paid partially from taxpayer funds — was not tied to any performance standards or goals. The Attorney General’s Office said it will review the findings.
Fick resigned this month amid the audit and a host of other concerns after elected Port commissioners said they had lost trust in him and suspended him. Fick received a $24,500 bonuses under the program, on top of a $350,000 salary.
The list released by the Port shows Fick was far from the only senior manager to benefit from the bonuses.
All 13 people listed under the “leadership team” on the Port’s website when the bonuses were approved got more than $10,000 apiece in payouts on top of annual salaries of more than $150,000 each. So did more than 45 others.
Chief Financial Officer Dan Thomas, in charge of overseeing the Port’s budget and auditing, received a $16,304 bonus on top of a salary of nearly $233,000. Chief Legal Counsel Craig Watson, in charge of reviewing the legality of the bonuses, got a $15,429 bonus in addition to a $220,000 salary.
After Fick, the employee who got the biggest payout was Mark Reis, a managing director of aviation, who said months before the bonuses were handed out that he was going to retire in 2016. Reis got $17,828 on his way out, in addition to a $254,000 salary.
In all, about one-third of the Port’s 2,000 employees received money. The Port said the one-time bonuses were in response to an increase in nonunion employees’ workweek, from 37.5 to 40 hours per week, in an attempt to line up more closely with union workers’ pay structure.
The bonus program was said to be more economical than handing out ongoing raises.
The five members of the Port Commission that approved the bonuses did not receive the money. Fick and his team rolled out the plan in public meetings, but the former CEO said the idea was first proposed by a commissioner in a private conversation.
“We tried to be as inclusive as possible,” Fick said in an email Tuesday. About 650 “salaried (nonunion) employees work at the port, they ALL received the one time payment.”
The Port said the bonuses had the intended effect of keeping employees happy.
Paula Edelstein, the Port’s senior human-resources director, said the agency received an “emotionally charged outcry” from employees who reported low morale over several administrative changes a few years ago, including the formation of the new Northwest Seaport Alliance with the Port of Tacoma.
After the bonuses were handed out, she said only 29 employees left voluntarily in 2016 for reasons other than retirement.
“At the end of the day, the one-time payment was the right thing to do for both employees and taxpayers,” Edelstein said at a hearing last week. Edelstein received nearly $14,700 from the bonus on top of her $210,000 salary.
The State Auditor’s Office took issue with the Port’s method of doling out the bonuses. It said the Port should have tied the money to work performed or to meeting certain goals, perhaps through giving the money out in monthly installments after employees earned the payouts.
Commission Chair Tom Albro said at a meeting last week that, “We should have probably done it differently.” But he added he agreed with Fick that “the result was what we were looking for.”
The Port is reviewing how to proceed and hasn’t said whether it might seek repayment from employees who received bonuses.
State auditor Pat McCarthy said Tuesday she was satisfied with the Port’s plan to investigate the payouts and enact changes to ensure a similar scenario doesn’t play out again. Her office will review the Port’s potential reforms a year from now.
“A bright light was shined on it, and the Port is taking action,” McCarthy said. “The commission seems to be taking efforts to make some substantive changes in their operations.”
The Port released the list of employees who received bonuses in response to a public-records request made by the Puget Sound Business Journal.