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The
recent process concerning the selection of Postmaster General
highlights the need for changes in how the U.S. Postal Service
compensates its top executives. The promise that a Stephen
Goldsmith selection held further illustrates the point. A $161,200
annual salary is not sufficient to attract the top-caliber
executive that the USPS needs at its helm.
Today,
John E. (Jack) Potter was selected as the new postmaster general
of the United States Postal Service. His selection came after
months of intense searching. The Board of Governors had retained
the services of the well-renowned executive search firm of
Korn/Ferry International.
It was evident that the USPS needed a fresh perspective from a top
individual (preferably from the private sector) who could steer
the USPS back into the black and into the 21st century.
Of course, there was one small problem compensation. The USPS
could only offer $161,200 annually as total compensation. Seems
like a lot of money and it is. But:
The USPS
is ranked #14 in the Hoovers 500 listings, which ranks by sales.
This puts the USPS right behind Verizon Communications Inc. (#13),
AT&T (#12) and ahead of such notable companies as J.P. Morgan
Chase & Co. (#15), Texaco Inc. (#20), Sears, Roebuck and Co.
(#35), and Microsoft (#92). Furthermore, each of the Postal
Service's seven product lines would qualify as a Fortune 200
company on its own. You can bet that none of the CEOs of these
companies earned just $161,200 for the year. Furthermore, the USPS
is the nation's second largest employer with approximately 800,000
employees. Moreover, the U.S. Postal Service is one of our
nation's most critical assets, providing a secure communications
network that links all parts of the country and beyond. To sum it
up, the USPS is one of our nation's largest (in capital assets,
sales, and employees) and most important institutions.
Accordingly, the USPS should have at its helm one of the best
executives in the country. The USPS needs (requires) a Jack Welch,
or a Lee Iacocca, or a Ross Perot, or a Stephen Goldsmith type
individual at its helm for the USPS to reach its fair potential.
Instead,
with the salary cap, we have Mr. Potter. Note: This editorial does
not seek to discredit Mr. Potter. Potter is a talented, capable,
and dedicated individual who has much to offer the USPS. However,
Mr. Potter received his current post almost by default, after a
more suitable preferred candidate from the private sector, who was
willing to work for $161,200 a year, could not be found.
Many
people are calling for the USPS to be run more like a business.
Many in the postal industry agree that the USPS must adopt
private-sector practices in order to survive in an increasingly
competitive and changing market. Yet, the USPS pays its top
executive a government bureaucrat's salary of $161,200. Guess
what? The USPS is run like a government bureaucracy! The old adage
holds true: You get what you pay for! Bottom line, for the USPS to
be run like a business (ie. a Fortune 200 company), the USPS must
be able to offer Fortune 200 salaries.
I
believe that many in the USPS would assume that rank and file
craft employees would balk at seeing the postmaster general's
salary increased beyond its current cap. True, some would balk.
However, many others wouldn't - if the right person were selected.
Recently, PostalWorkersOnline.com asked its viewers for their
picks for the next postmaster general. Lee Iacocca, Herb Kelleher,
and Ross Perot were a few of the names mentioned. None of these
names come cheap.
So how
much should the postmaster general's salary be increased to
attract a top executive capable of effectively and efficiently
running a company with $64.5 billion in sales and 800,000
employees? The answer is, "let the market decide". That's not to
say the USPS should necessarily have to offer millions in annual
salary and tens of millions in stock options or other
compensation. But here's my solution:
First,
the USPS should seek legislative approval to remove the salary
cap. Then, the next time the postmaster general position needs to
be filled the USPS should contact Korn/Ferry and place an ad in
the Wall Street Journal indicating it is in need of a suitable
candidate. The ad should include the words "salary commensurate
with experience" or "send salary requirements to
". This way, the
Board of Governors would be able to consider all aspects the
candidates, their experience, and salary expectations, just as
private-sector and top 200 companies do. The Board of Governors,
just like any Board of Directors, would then be able to pick the
person who would best serve the U.S. Postal Service's interests. |
