fourteen Amtrak executives received more than $200,000 in incentive bonuses last year despite poor financial performance and struggles with capital improvement projects, according to documents obtained by The New York Times.
By 2023, Amtrak paid more than $5 million in short- and long-term incentive bonuses to executives even as the passenger rail service lost $1.7 billion, according to records obtained from Sen. Ted Cruz’s office. The main problem for Amtrak is its efforts to upgrade service on the Acela, a popular high-speed express route between Boston and Washington, DC
“From delays to new Acelas to annual shortfalls in the billions of dollars, the performance of Amtrak has been much less,” said Mr. Cruz. “It’s inexplicable that more Amtrak executives are collecting six-figure bonuses on the taxpayers’ dime.”
Amtrak says executive bonuses are necessary to attract and retain rail talent and expertise.
The incentive bonus program for 2021 came under scrutiny after The Times reported that the company had paid out about $2.3 million in bonuses as the rail service reported its lowest earnings and biggest losses in more than a decade. On Wednesday, the House Transportation and Infrastructure Committee is set to hold a hearing to discuss two bills to increase transparency and accountability regarding Amtrak’s bonus payments.
Amtrak is not paying bonuses in 2020 amid pandemic disruptions to the nation’s passenger rail service and much of the travel industry. Since then, Amtrak has paid out about $12 million in incentive bonuses.
Amtrak’s executive chairman, Stephen Gardner, was among three executives who did not receive a long-term incentive bonus last year but received the largest short-term incentive bonus payment of about $320,000. Mr. Gardner testified in 2023 before a House panel that his annual salary was a little under $500,000 a year.
Roger Harris, president of Amtrak, received the highest long-term goal pay at about $305,000. In addition, Mr. Harris also received another $232,000 in short-term bonuses paid to compensate the total incentive bonus of more than half a million dollars for 2023.
Eleanor Acheson, general counsel of services and corporate secretary, and Tracie Winbigler, chief financial officer, also received incentive bonuses of about half a million dollars last year.
Amtrak has defended the payments in recent years, saying the bonuses help make the job more competitive and in demand. The chief executives of freight railroads, which are profitable, earned millions in bonuses and incentive payments last year, for example.
“For Amtrak to be successful, we must attract skilled workers across the U.S. and compete with private sector freight railroads, consulting firms, airlines and others looking for a supply of qualified staff in the U.S.,” Christina Leeds, a spokeswoman for Amtrak, said. in a statement this week.
The passenger rail service is lowering its reported losses from about $2 billion in 2021 to about $1.7 billion in 2023. The rail service continues to lose potential revenue as it struggles to phase out the older Acela trains on the Northeast Corridor and acquire them. the replacement is up and running. The new Acela trains are expected to travel at higher speeds and increase the number of customers Amtrak can carry from Washington to Boston, but the project is three years behind schedule.
Amtrak said executive bonuses are based on ridership, customer satisfaction and financial performance. A letter sent from Mr. Cruz, Republican of Texas, and Senator Deb Fischer, Republican of Nebraska, to Amtrak on Tuesday said the bonuses were not justified because the service failed to meet customer satisfaction goals and lost billions.
“C-suite executives from other companies with annual losses of more than $1 billion will be fired,” the letter said. “Amtrak, however, is rewarding. These bonuses are very attractive because they are at the expense of taxpayers without Amtrak having achieved satisfactory performance.
As the train service moves forward on improvement projects, including new Acela trains and replacing aging regional trains, officials there find themselves trying to rebuild their workforce and skills after years of decline.
By 2021, the Biden administration is making the largest investment in passenger rail since Amtrak began operations in 1971 as part of a $1 trillion infrastructure bill. Congress set aside $66 billion for the rail sector, a third specifically for Amtrak.
Amtrak has lost money every year since it began operating. The rail service almost turned a profit in 2019, but the pandemic opened up an opportunity, and the company began to build on it.
He said he created a bonus incentive program in 2013 after changes in the pension program and closing it for new employees, which has saved the service flow of hundreds of millions of dollars, Ms. Leeds.
“We used to offer defined pensions and retiree benefits to attract employees who were paid regardless of performance,” she said. “We’re moving, at the recommendation of Congress, to performance-driven incentives — lower incentives for taxpayers and more business results.”
In fiscal year 2023, Amtrak met two of the three goals set for the short-term bonus program by reducing the number of delays and reducing operating losses by $90 million more than the targeted goal. Customer satisfaction continues to be a challenge for the service, as it barely misses reaching the milestones it has set. There are no bonuses tied to customer satisfaction, Leeds said.
For the long-term goal of the service, which is set again in 2021, Amtrak met four out of five, but the service again performed less than customer satisfaction.
In fiscal year 2023, which ended in September, Amtrak customers took nearly 29 million trips with the company, up about 25 percent from the previous year. By comparison, Amtrak only reports about 12 million customer trips in 2021.
The increase in the number of passengers and ticket sales led to an increase in operating revenue of $3.4 million, which was 20 percent higher than the previous year but still not enough to help the company make a profit.
