Adequately under-compensated

“Vermont’s challenge is neither unemployment nor overcompensation; it’s under underemployment and under-compensation”

says Bill Schubart at the close of an opinion piece on VPR Wednesday. However the focus was not specifically on either the under-employed or even the under-compensated, but on departing Fletcher Allen CEO Dr. Estes. Schubart states that her pay package ($826,000 plus a potential performance bonus of $245,000), which he helped negotiate, was “right.”

No reason to doubt that Fletcher Allen CEO Dr. Estes faced challenges and from reports managed to successfully meet them as she was paid to do. With 6,800 employees Schubart tells us the Medical Center is more complex than some of Vermont’s private businesses where some CEOs earn even more.

By way of explaining, Schubart notes that private-sector executive compensation in America is an international embarrassment to democratic principles, and he seems aghast at the large and growing wage disparities nationally. He cites a recent Washington Post examination of these horrors.But apparently he feels Vermont is unique and any similar feeling regarding Vermont CEOs in uncalled for.

“Recent news reports indicate that Vermonters, too, feel their business and nonprofit executives are overcompensated. But are they? We all feel more secure singing in a chorus than singing solo, but let’s look at reality.”

By one measure executive pay, even in Vermont, is out of proportion to workers earnings: although Vermont’s Merchant Bank CEO Michael Tuttle is at the “modest” end of compensation at $396,069, his compensation is still 11 times the median worker’s pay (do the math: half of Merchants Bank employees earn less than $36,000 a year). In 2010 then-CVPS CEO Bob Young made $1,151,178, and Green Mountain Coffee Roasters head Larry Blanford made $2,406,207.

After a lifetime in Vermont’s public and private sectors, Schubart confidently says he has

“seen nonprofit leadership salaries ranging from $36,000 to $1M a year and have yet to see an overcompensated executive in that sector. Mostly, I have seen the opposite.”

Therefore, he feels Vermonters who raised eyebrows at Melinda Estes’ pay package are piling on our homie non-profit CEO.

In some circles $826,000 plus performance benefits may be considered under-compensating, but by the standards of the crowd I run with that’s pretty rich. It is his turf, so Schubart could have a point about the package he helped negotiate being “right.” However for a large number of Vermonters who have had little or no increase in their earnings for years – and in the case of Vermont state employees, who’ve seen decreases in pay – it may be hard to spare much sympathy for wealthy Vermonters who apparently quite rich enough.

Maybe it’s high time to start a concerted effort to hike-up wages at the bottom first. We can do that if we make sure the sacrifice is shared by raising tax rates on those well-compensated folks bringing home over $250k a year, as Senator Bernie Sanders has recommended nationally to President Obama.
Then perhaps we could help under-compensated Vermont private sector and non-profit executives catch-up to their national counterparts. Until then, they may do just fine, as Dr. Estes has.