Executive pay at state-owned companies exceeds pay for governor, agency heads

FAIRBANKS — A new report on the salaries of executive branch employees in Alaska state government shows that top managers at state-owned corporations — with one exception — earned more than state commissioners or the governor in 2014.

The report covers nearly 200 top officials in 14 departments, plus the University of Alaska and 12 state-owned corporations.

Salaries for the leaders of five of the corporations topped the governor's salary of $145,000 by more than $100,000 last year, while two of them exceeded it by more than $200,000. At the University of Alaska, the president, three vice presidents and three chancellors all earned more than $200,000 in 2014.

One reason for the differential between pay at the top of state departments and state corporations is the degree to which salaries are subject to public discussion and debate.

The salary for all 14 commissioners is set by the Legislature at about $137,000, while appointed boards set pay levels for leaders of state corporations. Determining the pay rate for commissioners is a high-profile process in the Legislature, while appointed boards act in meetings that are usually low-key and not well publicized.

The appointed boards are more likely to argue that higher compensation is going to attract more competent applicants, while the legislative discussion is more likely to hinge on keeping expenses down, minimizing discussion about the cost of competence. In general, appointed boards are not as wary as legislators about how their actions will be interpreted because they don't have to run for office. And arguing for higher salaries for top state officials is not the stuff that election ads are made of.

Under the system that has evolved, the leaders of state companies make more than the leaders of state agencies, regardless of the size of the workforce and budget or the complexity of the job.

One of the consequences is that it is now more the rule than the exception that deputy commissioners are paid more than commissioners. Many of the deputy commissioners have been on the job longer and risen through the ranks, earning higher pay as they progress in their careers.

Among the departments where one or more deputies or division directors earned more than their bosses in 2014 were administration, education, environmental conservation, fish and game, the governor's office, health and social services, labor, law, natural resources, public safety and transportation, the compensation report said.

A year ago, the Legislature unanimously rejected a plan that would have given commissioners a $10,000 raise and bumped up the governor's pay to $151,000. An independent commission had supported the raises but lawmakers balked. The commission also said that deputy commissioners should not have to take a cut in pay as the price of a promotion.

Even had those increases been approved, the commissioners and the governor would be earning less — in some cases $200,000 less — than the heads of state companies.

Though he is not the highest paid person in state government, the corporate leader at the top of the pay pyramid is Dan Fauske, the executive director of the Alaska Gasline Development Corp. He earned $366,015 in 2014. The chief investment officer of the Alaska Permanent Fund earns $393,000, but since he does not lead that agency he is not listed in the report. The law specifies that only the top executive at a corporation must be named in the report.

Seven employees at AGDC make more than $190,000 and many others in various parts of state government earn more than the governor. The report does not include employees who are just below the top on the organization chart, members of the legislative branch or the judicial branch. About 170 people had higher salaries than the governor in 2012, according to a state review.

The leaders of state-owned entities and their 2014 salaries:

Michael Burns, Alaska Permanent Fund Corp., $343,658; Bryan Butcher, Alaska Housing Finance Corp., $253,125; Craig Campbell, Alaska Aerospace Corp., $225,000; Sara Fisher-Goad, Alaska Energy Authority, $160,000; Ted Leonard, Alaska Industrial Development and Export Authority, $180,000; Jeff Jessee, Alaska Mental Health Trust Authority, $181,540; Deven Mitchel, Alaska Municipal Bond Bank, $152,984; William O'Leary, Alaska Railroad, $250,000; Michael Cerne, Alaska Seafood Marketing Institute, $117,459; Diane Barrans, Alaska Student Loan Corp., $198,247; Judy Dougherty, Knik Arm Bridge and Toll Authority, $152,697.

University administrators included: President Pat Gamble, $320,000; Vice President for University Relations Carla Beam, $202,800; Vice President for Finance and Administration Roy Ashok, $210,000; Vice President for Academic Affairs Dana Thomas, $240,809; University of Alaska Fairbanks Chancellor Brian Rogers, $312,696; University of Alaska Anchorage Chancellor Tom Case, $259,472; and University of Alaska Southeast Chancellor John Pugh, $219,878.