Ex-Metra chief could get two raises for doing nothing
BY ROSALIND ROSSI Transportation Reporter email@example.com July 1, 2013 10:56PM
A head-hunting has narrowed its list of finalists to replace former Metra CEO Alex Clifford, pictured here showing off new electrical outlets in the Metra rail cars in 2013. | Sun-Times files
Updated: August 3, 2013 6:43AM
Former Metra CEO Alex Clifford stands to reap two salary hikes after leaving the suburban rail agency — amounting to what a key lawmaker called “a raise to stay away.’’
It’s yet another bizarre twist to a golden parachute attracting increasing heat.
The pay increases, totaling more than 6 percent, cover Clifford for more than two years after a June 21 resignation tied to what Metra Board Chairman Brad O’Halloran has described as a “generous” separation agreement.
Clifford walked in Metra’s door Feb. 11, 2010, making $252,500. He was charged with cleaning up the mess of his scandal-scarred predecessor, who killed himself by stepping in front of a Metra train.
Under the terms of Clifford’s golden parachute, he could take the next 26 months off and still make a $284,196 annual salary by the end of that time. His total haul over those 26 months could be nearly $750,000, the separation deal indicates.
State Rep. Jack Franks (D-Marengo) noted that Clifford’s original Feb. 11, 2010, hiring agreement said Clifford was “eligible’’ for annual “performance” increases of up to 3 percent upon the Metra Board’s approval.
Instead, “They gave him a performance raise to leave. They gave him a raise to stay way because he’s more valuable staying away,” Franks said.
“It’s tantamount to lunacy. They ought to be locked up — the board. Keep them away from our money.’’
Franks and state Rep. Deborah Mell (D-Chicago) are seeking to have a joint legislative hearing of committees they chair to question Clifford and Metra Board members about Clifford’s severance deal. Both want to know why the Metra Board didn’t just buy Clifford out of the eight months left on his contract, or let him serve out those eight months.
Jack Schaffer, the sole Metra Board member who voted against the Clifford deal, said he, too, is troubled by the board’s failure to consider just letting Clifford serve out his contract.
“The part that bothers me is that Alex was willing to serve through February [2014 when his contract expired] and [then] leave, and then his severance package would have been nothing,’’ Schaffer told the Sun-Times Monday.
“But the chair [Brad O’Halloran] wanted him out right now, and he also wanted that silence clause,’’ which bars board members from talking about the severance negotiations unless questioned by an oversight body.
“Frankly, I think the whole thing stunk from beginning to end. It was totally unnecessary,’’ said Schaffer, who voted “hell no!” in opposing the package.
Schaffer called the separation agreement “an abomination” and said, if called to testify about it, he would appear “with bells on.’’
Neither O’Halloran nor Andrew Greene, an attorney who represented the Metra Board during its negotiations, responded to phone calls from the Sun-Times Monday.
Other heat on the deal has come from RTA Chairman John Gates Jr., who last week ordered an RTA review of it, and Cook County Commissioner Peter Silvestri, who wants the Cook County Board to look into the matter.
Clifford’s original hiring agreement calls for no severance should he resign, and a mere six months of pay if he is fired without cause, Franks has noted.
Instead the Metra Board agree to pay Clifford:
◆ $442,237 for the eight months left on his contract, the six months after that, and benefits;
◆ Up to $307,390, according to O’Halloran, for an extra 12 months to cover the difference in salary between any new lesser paying job and what Clifford would have received at Metra — something Franks called a “disincentive for [Clifford] to find work.’’
◆ Up to $75,000 in “reasonable attorneys fees incurred in representing Clifford in relation to Metra;” an amount Franks said could bankroll a single attorney for a year;
◆ Up to $78,000 in reimbursable moving expenses, including up to $48,000 for the real estate agent commission and other closing costs on the sale of Clifford’s home. Said Franks: “Everybody else has to pay the realtor, except him.”
Thomas Lys, professor of accounting and management at Northwestern University’s Kellogg School of Management, noted that Clifford’s separation agreement indicates the Metra Board gave him a “previously agreed” 3 percent “performance’’ raise effective Jan. 1, 2012, based on his 2011 performance.
Clifford then received a second 3 percent “performance’’ raise, effective Jan. 1, 2013, but it is not clear from the agreement if that was approved retroactively as part of his separation deal, Lys said. A Metra spokesman refused to say Monday when the Board approved that raise.
A third 3 percent raise will kick in Jan. 1, 2014, and fourth will start Jan. 1, 2015, according to the agreement.
“The real question is whether this is a judicious use of taxpayer money,’’ Lys said. “It’s the [Metra] riders, the citizens of Illinois, who are all chipping in here.’’
Clifford has told the Sun-Times by email that he is “personally insulted by any suggestion” he would “deliberately try to stay unemployed to collect the final 12 months of pay.’’
Clifford said he started mowing lawns at age 11 and “I have worked every day since then.”