Fourteen Amtrak executives received incentive bonuses of more than $200,000 last year, despite the company's recent poor financial performance and struggling capital spending plans, according to documents obtained by The New York Times.
Records obtained from Sen. Ted Cruz's office show that Amtrak paid executives more than $5 million in short-term and long-term incentive bonuses in 2023, even as the passenger rail service posted a $1.7 billion loss. Particularly problematic for Amtrak are efforts to improve service on its Acela, a popular high-speed express line that runs between Boston and Washington, D.C.
“From delays to the new Acelas to annual multi-billion dollar deficits, Amtrak's performance is deeply flawed,” Cruz said. “It is baffling that more than a dozen Amtrak executives received six-figure bonuses using taxpayer money.”
Amtrak says the executive bonuses are necessary to attract and retain top talent and railroad expertise.
The company's 2021 incentive bonus plan has come under intense scrutiny after The Times reported that the company paid out about $2.3 million in bonuses at a time when the railroad reported its lowest revenue and largest loss in more than a decade. On Wednesday, the House Transportation and Infrastructure Committee is scheduled to hold a hearing to discuss two bills aimed at increasing transparency and accountability regarding Amtrak's bonus payouts.
Amtrak didn't pay any bonuses in 2020 because the pandemic disrupted much of the nation's passenger rail service and travel industry. Since then, Amtrak has paid out about $12 million in incentive bonuses.
Amtrak Chief Executive Steven Gardner was one of three executives who did not receive a long-term incentive bonus last year, but he received the highest short-term incentive bonus, about $320,000. Gardner testified before a House committee in 2023 that his annual salary was just under $500,000 a year.
Amtrak President Roger Harris received the largest amount in long-term milestone achievement pay, about $305,000, and will also receive a short-term bonus of about $232,000, bringing his total incentive bonus compensation for 2023 to more than $500,000.
The department's general counsel and executive director, Eleanor Acheson, and chief financial officer, Tracy Winbigler, also received incentive bonuses of about $500,000 last year.
Amtrak has defended its payouts in recent years, arguing that the bonuses make hiring employees more competitive and attractive. The profitable freight railroad's chief executive officer, for example, received millions of dollars in bonuses and incentives last year.
“To be successful, Amtrak needs to attract highly skilled employees from across the country and compete with private freight railroads, consulting firms, airlines and others seeking talented staff for our nation's limited supply,” Amtrak spokeswoman Christina Leeds said in a statement this week.
The passenger railroad company lowered its reported losses to about $1.7 billion in 2023, down from about $2 billion in 2021. The railroad continues to miss out on potential revenue as it struggles to phase out its aging Acela trains on the Northeast Corridor and get replacement trains up and running. The new Acela trains will run faster and are expected to increase the number of passengers 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. In a letter to Amtrak on Tuesday, Cruz, R-Texas, and Sen. Deb Fischer, R-Nebraska, argued the bonuses are unfair given the company has missed customer satisfaction targets and is losing billions of dollars.
“At any other company with annual losses of more than $1 billion, top executives would be fired,” the letter said, “but Amtrak is rewarding them. These bonuses are particularly infuriating in that they are being paid at taxpayer expense despite Amtrak's unsatisfactory performance.”
As the rail service continues to push forward with improvement projects such as new Acela trains and replacing antiquated regional trains, officials are trying to build up workforce and expertise after years of setbacks.
In 2021, as part of a $1 trillion infrastructure bill, the Biden administration made the largest investment in passenger rail since Amtrak began service in 1971. Congress allocated $66 billion to the rail sector, one-third of which is dedicated to Amtrak.
Amtrak has lost money every year since it began operating. The rail service nearly turned a profit in 2019, but the pandemic put a stop to that opportunity, and the company has been trying to make up ground ever since.
The company created a bonus incentive plan in 2013 after changing its pension plan and scrapping it for new employees, which Leeds said has saved the railroad hundreds of millions of dollars.
“We used to attract employees through defined pension and retirement plans, where salaries were not related to performance,” she said. “At the recommendation of Congress, we moved to performance-based incentive plans because incentive plans are less costly to taxpayers and lead to improved performance.”
For fiscal year 2023, Amtrak achieved two of the three goals set for its short-term bonus program by reducing delays and cutting its operating loss by $90 million more than targeted. Customer satisfaction continued to be an issue for the service, which fell just short of meeting the milestones it set. No bonuses were awarded related to customer satisfaction, Leeds said.
In terms of long-term service goals set for 2021, Amtrak met four of the five targets, but again fell short of expectations in customer satisfaction.
In fiscal year 2023, which ends in September, Amtrak customers are expected to take about 29 million trips with the company, up about 25% from the year before. By comparison, Amtrak reported that customers took only about 12 million trips in 2021.
Increased ridership and ticket sales boosted operating revenues by $3.4 million, up 20 percent from the previous year, but still not enough for the company to turn a profit.