U.S. Postal Service: Issues Related to Governance of the Postal Service
(Letter Report, 08/14/97, GAO/GGD-97-141).
Pursuant to a congressional request, GAO obtained information on Postal
Service governance issues, focusing on: (1) any major areas of concern,
including specific issues, that current and former members of the Postal
Service Board of Governors have about the Board and their suggested
legislative changes; (2) major characteristics of the Postal Service's
Board of Governors with the characteristics of selected boards of their
government-created corporations or corporation-like organization to
identity similarities and dissimilarities, particularly as they relate
to the major areas of concern identified by current and former Board
members; and (3) information on governance issues that might be helpful
to the House Committee on Government Reform and Oversight, Postal
Service Subcommittee as it deliberates Postal Service reform.
GAO noted that: (1) a majority of current and former members of the
Postal Service Board of Governors GAO interviewed said legislative
attention was needed in three broad areas; (2) however, there was not a
consensus among the members on what the specific issues were within each
area of concern, or what legislative changes should be considered to
address their concerns; (3) the major areas of concern were the Board's
authority, Board members' compensation, and Board members'
qualifications; (4) within these broad areas of concern, the most
frequently cited issues were: (a) the limitations on the Board's
authority to establish postage rates; (b) the inability of the Board to
pay the Postmaster General more than the rate for level I of the
Executive Schedule; (c) the Board's lack of pay comparability with the
private sector; and (d) qualification requirements that are too general
to ensure that Board appointees possess the kind of experience necessary
to oversee a major government business; (5) GAO's comparison of the
Board of Governors with nine other boards of government-created
organizations showed both similarities and dissimilarities; (6)
similarities indicate that these boards were created to function much
like private-sector corporate boards; (7) dissimilarities, however,
reflect the amount of flexibility the boards were given to operate like
private sector corporations; (8) GAO also identified four broad areas
where some of the interviewees, but less than a majority, believed
legislative attention was needed; (9) these areas were the Board's
mission and responsibilities, the Board's relationship with Postal
management, the Board's accountability and performance measures, and
Board composition; (10) the most frequently cited issues in these areas
were: (a) uncertainties as to how far the Board should go in letting the
Postal Service compete and operate like a private-sector corporation;
(b) the limited specificity in law concerning the Board's oversight
responsibilities, and (c) perceptions that the Chief Postal Inspector
may not have all the independence the position requires; and (11) the
interviewees' concerns about many issues, such as Board authority,
accountability, and how far to let the Postal Service go in competing
and operating like a private sector corporation, are issues being
grappled with in the larger context of streamlining government
operations.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-97-141
TITLE: U.S. Postal Service: Issues Related to Governance of the
Postal Service
DATE: 08/14/97
SUBJECT: Federal corporations
Postal service
Postal law
Postal rates
Competition
Comparative analysis
Proposed legislation
Executive compensation
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Cover
================================================================ COVER
Report to the Chairman, Subcommittee on the Postal Service, Committee
on Government Reform and Oversight, House of Representatives
August 1997
U.S. POSTAL SERVICE - ISSUES
RELATED TO GOVERNANCE OF THE
POSTAL SERVICE
GAO/GGD-97-141
Issues Related to Governance of the Postal Service
(240215)
Abbreviations
=============================================================== ABBREV
AFL-CIO - American Federation of Labor-Congress of Industrial
Organizations
AMTRAK - National Railroad Passenger Corporation
CEO - chief executive officer
COMSAT - Communications Satellite Corporation
CPB - Corporation for Public Broadcasting
DPMG - Deputy Postmaster General
FDIC - Federal Deposit Insurance Corporation
GSE - government-sponsored enterprise
NAPA - National Academy of Public Administration
PMG - Postmaster General
PRC - Postal Rate Commission
RTB - Rural Telephone Bank
TVA - Tennessee Valley Authority
USPS - U.S. Postal Service
Letter
=============================================================== LETTER
B-272702
August 14, 1997
The Honorable John M. McHugh
Chairman, Subcommittee on the Postal Service
Committee on Government Reform and Oversight
House of Representatives
Dear Mr. Chairman:
This report responds to your request that we obtain information on
Postal Service governance issues. You indicated that the views of
current and former members of the Postal Service's Board of Governors
would be particularly useful to the Subcommittee as it deliberates
its current legislative proposal to reform the U.S. Postal Service
(USPS).\1 Our objectives in this report were to (1) identify any
major areas of concern, including specific issues, that current and
former members of the Postal Service Board of Governors have about
the Board and their suggested legislative changes; (2) compare the
major characteristics of the Postal Service's Board of Governors with
the characteristics of selected boards of other government-created
corporations or corporation-like organizations\2 to identify
similarities and dissimilarities--particularly as they relate to the
major areas of concern identified by current and former Board
members; and (3) provide additional information on governance issues
that might be helpful to the Subcommittee as it deliberates Postal
Service reform.
We also discuss areas where some, but less than a majority of,
current and former Board members indicated legislative attention is
needed. Additionally, we identify governance topics discussed with
current and former members where none believed legislative attention
is needed.
We draw no conclusions nor make any recommendations concerning the
governance issues raised by the interviewees and their suggested
legislative changes.
--------------------
\1 Postal Reform Act of 1997, H.R. 22, 105th Congress (1997).
\2 As agreed with the Subcommittee, we did not restrict our
comparisons to only those organizations legislatively designated as
"government corporations." Comparisons were made with The National
Railroad Passenger Corporation (AMTRAK), Australia Post, Canada Post,
Corporation for Public Broadcasting (CPB), Federal National Mortgage
Association (Fannie Mae), Federal Deposit Insurance Corporation
(FDIC), Federal Home Loan Mortgage Corporation (Freddie Mac), Rural
Telephone Bank (RTB), and Tennessee Valley Authority (TVA). We also
attempted to include the Communications Satellite Corporation
(COMSAT) in our study. However, after agreeing to participate,
COMSAT did not furnish the requested information.
BACKGROUND
------------------------------------------------------------ Letter :1
The Postal Service is a corporation-like organization that was
created by the government to provide postal services and to help bind
the nation through the personal, educational, literary, and business
correspondence of the people. Over the years, the government has
created a number of corporations or corporation-like organizations to
fulfill a variety of public functions or purposes of a predominately
business nature. Historically, such organizations have been created
on an individual need basis with the characteristics and functions of
each being tailored to its specific mission. In general, these
organizations can be identified under certain categories, such as
wholly-owned government corporations, mixed-ownership government
corporations, government-sponsored enterprises (GSE), or
government-created private corporations. Grouping these
government-created corporations and corporation-like organizations
into these categories can be helpful because such organizations share
certain common characteristics. However, for comparative purposes,
it should be noted that even within these categories, the
organizations are structured and governed in a variety of ways.
Therefore, for purposes of this report, we found it more helpful to
review each organization in our study individually without regard to
any particular category under which it may be identified. Appendix I
contains additional information about government-created corporations
and corporation-like organizations.
The Postal Reorganization Act of 1970 (1970 Act) created the Postal
Service, designated it as an independent establishment of the
executive branch, and created a Board of Governors to be its
governing body. The Postal Service is not identified as falling
under any particular category of government corporation or
government-created corporation-like organization. The Postal Service
has reported that it is not a government corporation; however, it is
frequently considered by others to be one and has been previously
included in major government corporation studies done over the last
several years.
According to the Postal Service, its Board of Governors is comparable
to the board of directors of a private sector corporation. The Board
of Governors directs the exercise of the powers of the Postal
Service, directs and controls its expenditures, reviews its
practices, and conducts long-range planning. It sets policy;
participates in establishing postage rates; and takes up matters,
such as mail delivery standards and capital investments and
facilities projects exceeding $10 million. It also determines the
pay of the Postmaster General (PMG) and approves the pay of other
Postal Service officers. By statute, the Postal Service is to
maintain compensation and benefits for all officers and employees on
a standard of comparability with the private sector. However, no
officer or employee can receive pay in excess of the rate for level I
of the Executive Schedule--currently $148,400.
The Board consists of 11 members, including (1) 9 Governors appointed
by the president, with the advice and consent of the Senate, to 9
year staggered terms; (2) the PMG, who is appointed by the Governors;
and (3) the Deputy Postmaster General (DPMG), who is appointed by the
Governors and the PMG.
By law, Governors are chosen to represent the public interest and
cannot be representatives of special interests. They serve part time
and may be removed only for cause. Not more than five of the nine
Governors may belong to the same political party. No other
qualifications or restrictions are specified in law. The 1970 Act
provided for each Governor to receive an annual salary of $10,000,
plus $300 a day and travel expenses for not more than 30 days of
meetings each year.\3 The act providing appropriations\4 to the
Postal Service for fiscal year 1997 increased the Governors' annual
salaries to $30,000 per year, but the $300 daily meeting allowance
remained unchanged.
--------------------
\3 Public Law 99-190, enacted in December 1985, amended the 1970 Act
to increase the number of paid meeting days from 30 to 42.
\4 The USPS is essentially a self-supporting organization; however,
it is authorized to receive three types of appropriations: public
service, transitional costs, and revenue foregone. Appropriations
received in fiscal year 1996 totaled about $130 million, which
accounted for about 0.2 percent of its total revenues.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :2
A majority of current and former members of the Postal Service Board
of Governors whom we interviewed said legislative attention was
needed in three broad areas. However, there was not a consensus
among the members on what the specific issues were within each area
of concern, or what legislative changes should be considered to
address their concerns. The major areas of concern were the Board's
authority, Board members' compensation, and Board members'
qualifications. Within these broad areas of concern, the most
frequently cited issues were (1) the limitations on the Board's
authority to establish postage rates; (2) the inability of the Board
to pay the PMG more than the rate for level I of the Executive
Schedule--currently $148,400; (3) the Board's lack of pay
comparability with the private sector; and (4) qualification
requirements that are too general to ensure that Board appointees
possess the kind of experience necessary to oversee a major
government business.
Our comparison of the Postal Service's Board of Governors with nine
other boards of government-created organizations showed both
similarities and dissimilarities. Similarities indicate that these
boards were created to function much like private sector corporate
boards. For example, all 10 boards were exempted from some statutes
and regulations that other government departments and agencies are
required to follow. Dissimilarities, however, reflect the amount of
flexibility the boards were given to operate like private sector
corporations. We noted many differences reported among the selected
government-created organizations in ratemaking processes,
compensation practices, and the processes used to appoint board
members. (See app. IV for detailed information about similarities
and dissimilarities among the boards of selected government-created
organizations.) For example, the Postal Service's ratemaking process
requires that its rate increases be reviewed by a third party; the
ratemaking processes reported by five other organizations included in
our study did not involve a third-party review.
We also identified four broad areas where some of the interviewees,
but less than a majority, believed legislative attention was needed.
These areas were the Board's mission and responsibilities, the
Board's relationship with Postal management, the Board's
accountability and performance measures, and Board composition. The
most frequently cited issues in these areas were (1) uncertainties as
to how far the Board should go in letting the Postal Service compete
and operate like a private sector corporation, (2) the limited
specificity in law concerning the Board's oversight responsibilities,
and (3) perceptions that the Chief Postal Inspector may not have all
the independence the position requires. Finally, there were two
areas that we raised for which none of the interviewees believed
legislative attention was warranted. These areas were Board staffing
and the Board's legal status.
The interviewees' concerns about many issues, such as Board
authority, accountability, and how far to let the Postal Service go
in competing and operating like a private sector corporation, are
issues being grappled with in the larger context of streamlining
government operations. A recent Congressional Research Service study
prepared for the Senate Committee on Governmental Affairs notes a
renewed interest in government corporations and discusses the
probability that even more government corporations will be created in
the next decade as government struggles to find ways to make
organizations more productive.\5 The study notes that the major
challenge will be holding government corporations accountable for
their policies and operations while at the same time allowing them
sufficient financial and administrative discretion to operate
efficiently and effectively--the same challenge that Congress faces
in reforming the Postal Service.
--------------------
\5 Managing the Public's Business: Federal Government Corporations
(S. Prt. 104-18, Apr. 1995).
SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3
To identify current and former members' areas of concern, including
specific issues and their suggested legislative changes, we (1)
interviewed all 11 members of the current Board (including the PMG
and DPMG); and (2) interviewed 2 former Governors appointed after
December 1, 1985, whom we were able to contact. We also interviewed
the PMG's predecessor and the PMG serving at the time of the 1970
Postal Service reorganization. The latter also served as the first
Chairman of the Board of Governors. Appendix II lists the
interviewees included in our study, position(s) held, and date(s) of
appointment.
We sent each interviewee a list of questions, judgmentally grouped
into broad areas, prior to our interview. This list guided our
interviews (see app. III). We asked each interviewee if he or she
had any issues or concerns within each of the broad areas. If the
interviewees had concerns, we asked them to elaborate and identify
any specific legislative action(s) they believed Congress might want
to consider. We also offered interviewees an opportunity to discuss
any other concerns related to the Board.
For each broad area discussed, we tallied the number of interviewees
who believed legislative changes were either needed or not needed.
If interviewees did not definitely answer yes or no, we did not
include their answers in our tallies.
To compare the characteristics of the boards of other
government-created organizations with those of the Postal Service
Board, we developed and sent a matrix to 11 boards,\6 including the
Postal Service Board. The matrix covered 73 characteristics, grouped
in such broad categories as (1) the board's mission and
responsibilities, (2) the board's authority, (3) board members'
compensation, and (4) board composition. In developing and refining
our matrix and interview questions, we researched and reviewed
available information on the structure and characteristics of public
and private corporate boards, reviewed prior work we had done on
government corporations, and consulted with knowledgeable individuals
on Postal Service Board activities.
Except for the Postal Service, we judgmentally selected the
government-created organizations included in our study in order to
have a mix of the various types. We selected two
government-sponsored enterprises, two wholly-owned government
corporations, two mixed-ownership government corporations, and two
federally created private corporations.\7 In making these selections,
we used our recent report on government corporations,\8 as well as
other prior work we had done, to identify organizations of various
types. To provide a broader range of organizations for comparison
purposes, we also selected two foreign postal administrations--Canada
Post and Australia Post. We selected these organizations primarily
because of our previous work in this area.\9 These organizations were
described in a recent Price Waterhouse report\10 as among the most
"progressive postal administrations."
In this report, we highlight differences between the Postal Service
and the other government-created organizations as they apply to the
four issues most frequently cited by current and former Board members
as needing legislative attention. Some of the other issues raised by
the interviewees, however, were outside the scope of our matrix.
Therefore, we did not have sufficient information to make comparisons
with the other government-created organizations on all of the issues
raised by the interviewees. Appendix IV contains selected details
from the matrices. We did not verify the boards' responses to our
matrix. However, we did ask each of the boards that completed our
matrix to review their respective sections of appendix IV for
accuracy.
To provide the Subcommittee with additional information on governance
issues that might be helpful in its deliberations on postal reform,
we reviewed a broad range of available literature affecting both
public and private boards. The result of our literature research is
included in our discussions of governance issues.
We conducted our review at postal headquarters in Washington, D.C.,
between July 1996 and April 1997 in accordance with generally
accepted government auditing standards.
We requested comments on a draft of this report from the PMG and the
Chairman of the USPS Board of Governors. Their comments are
discussed at the end of this letter and included as appendixes V and
VI, respectively.
--------------------
\6 The matrix was sent to 11 boards; however, COMSAT did not furnish
the information we requested.
\7 COMSAT was one of the two federally created private corporations
selected for inclusion in our study.
\8 See our report Government Corporations: Profiles of Existing
Corporations (GAO/GGD-96-14, Dec. 13, 1995).
\9 U.S. Postal Service: A Look at Other Countries' Postal Reform
Efforts (GAO/T-GGD-96-60, Jan. 25, 1996).
\10 A Strategic Review of Progressive Postal Administrations:
Competition, Commercialization, and Deregulation (Price Waterhouse
LLP, Feb. 1995).
AREAS WHERE A MAJORITY OF
INTERVIEWEES BELIEVED
LEGISLATIVE ATTENTION IS NEEDED
------------------------------------------------------------ Letter :4
A majority of the current and former members of the Postal Service
Board of Governors whom we interviewed believed legislative attention
may be warranted in three areas--the Board's authority, Board
members' compensation, and Board members' qualifications. Although
there was no consensus among the members on the specific issues
within each area of concern, several issues were mentioned
frequently, and a number of legislative changes were offered for
consideration. The most frequently cited issues were (1) the
limitations on the Board's authority to establish postage rates; (2)
the inability of the Board to pay the PMG more than the rate for
level I of the Executive Schedule--currently $148,400; (3) the
Board's lack of pay comparability with the private sector; and (4)
qualification requirements that are too general to ensure that Board
appointees possess the kind of experience necessary to oversee a
major government business.
BOARD'S AUTHORITY TO
ESTABLISH POSTAGE RATES
---------------------------------------------------------- Letter :4.1
The issue most frequently cited by current and former Postal Service
Board members as needing legislative attention was the limitations on
the Board's authority to establish postage rates. Ten of the 15
interviewees believed that the current ratemaking process adversely
affects the Postal Service's ability to compete with its private
sector competitors. They were concerned that the current ratemaking
process is too restrictive and therefore limits the Postal Service's
ability to quickly adjust postage rates in a highly competitive and
rapidly changing marketplace. Three of the remaining five
interviewees did not comment specifically on this issue, and two said
the current ratemaking process should not be changed.
Under the current ratemaking process, the Postal Service, through its
Board of Governors, is to propose changes to the Postal Rate
Commission (PRC)--an independent regulatory agency established in the
executive branch--and request that it issue a recommended decision.
PRC, after holding public hearings and reviewing data provided by the
Postal Service, is to provide the Postal Service Board of Governors
with its recommended decision concerning proposed rate changes. By
law, this process can take up to 10 months. After receiving a
recommendation from PRC, the Governors can approve, reject, or allow
the recommended rates to take effect under protest; or, under certain
circumstances, the Governors can modify a PRC decision. However,
before the Governors can modify any PRC-recommended rates, they are
required to return the rate case to PRC for reconsideration. After
PRC renders a further rate decision, the nine Governors can modify
that decision only by a unanimous vote--a task that some members said
was almost impossible to achieve because, in their experience, the
Governors seldom agree unanimously on any issue. In fact, there has
been only one instance--in 1980--where the Governors modified a PRC
recommendation for First-Class postage.
Interviewees suggesting legislative attention in this area offered a
number of changes for consideration. Two suggestions were mentioned
most frequently. One suggestion was to use administrative law judges
to hear rate cases and make recommendations to the Board--rather than
going through PRC. The members believed this change would streamline
the ratemaking process and still give due consideration to the views
of the mailing community. The other suggestion was that the Board be
given the authority to override a PRC recommended rate decision with
something less than a unanimous vote. For example, suggestions were
made that the unanimous vote requirement be changed to either a
majority or a two-thirds majority vote. Other legislative changes
offered for consideration included (1) giving the Board authority to
raise rates within legislatively established parameters (e.g., allow
the Board to raise postage rates annually up to the increase in a
designated index, such as the Consumer Price Index\11 ); (2)
restricting PRC's ratemaking role to monopoly mail\12 --and a related
suggestion allowing the Postal Service to establish private
sector-type subsidiary companies that would compete directly with
private carriers of nonmonopoly mail; and (3) legislatively requiring
that PRC render its rate decisions in much less time than the 10
months currently allowed by law. One interviewee, however, said the
law should not be changed to require faster decisions from PRC
because, given current complex ratemaking requirements, it is
unreasonable to expect faster decisions. The two interviewees who
said the current ratemaking process should not be changed agreed that
the current ratemaking process negatively affected the Postal
Service's ability to compete with private sector carriers. However,
they believed a better way of addressing the ratemaking issue was to
create a PRC-type body to regulate private sector carriers' rates
rather than change the ratemaking process within the Postal Service.
Our survey of nine other government-created organizations showed some
similarity between the ratemaking processes of the Postal Service and
the processes reported by two other organizations--Australia Post and
Canada Post. No similarities were apparent at the other seven
organizations.
According to Australia Post, its Board of Directors sets prices for
all products and services. The board must notify the Minister for
Communications and the Arts of any intention to alter the price of
the standard postal rate and the Minister has the opportunity to
disallow it. Although it has no direct authority over the price, the
Australian Competition and Consumer Council has the opportunity to
consider any proposal and make its views known to the Minister as
part of his/her consideration of proposed price alterations.
According to Canada Post, its Board of Directors oversees virtually
all ratemaking decisions. This includes decisions for such products
as basic domestic and international single-piece letters,
international printed matter, and some registered mail products.
Once new postage rate regulations are proposed, interested parties
are given a 60-day period during which they can provide written
comments on the rate change.
For various reasons, the ratemaking process at the Postal Service
contrasts sharply with the reported ratemaking processes at Fannie
Mae, Freddie Mac, AMTRAK, FDIC, and TVA. Each of these organizations
is permitted to set prices in a manner very much like any private
sector corporation--i.e., independent of a third-party review or
approval. Ratemaking processes at the RTB and the CPB are not
comparable to the Postal Service's ratemaking process. At the RTB,
its Board of Directors makes loans at legislatively established
rates. At the CPB, there are no products or services sold and,
therefore, no ratemaking procedures.
Proposed legislation introduced in Congress in January 1997 to reform
the Postal Service, H.R. 22, proposes significant changes to the
ratemaking process and to the long-standing relationship between the
Postal Service and PRC. Current law requires that the Postal Service
file a request with PRC for changes in rates for services offered.
H.R. 22 would change that requirement. It would divide postal
products into two categories, noncompetitive mail and competitive
mail.\13 Noncompetitive mail would include those products, such as
First-Class Mail, for which there are few alternatives to the Postal
Service. For products in the noncompetitive mail category, the
Service would establish rates using a price cap based on the Gross
Domestic Product Chain-Type Price Index\14 modified by an adjustment
factor, which PRC would determine every 5 years. Once the cap was
established, the Postal Service would generally be able to adjust
prices annually without filing a request for change with PRC.
Competitive mail, such as Express Mail, would include those products
facing full competition within the marketplace. The Postal Service
could price competitive products as it saw fit, without filing a
request for change with PRC. However, Postal Service pricing of
competitive mail would be subject to the constraints of the antitrust
laws as well as requirements that rates cover the Service's costs and
make a reasonable contribution to overhead. PRC would conduct annual
audits of the Postal Service to ensure it was acting in compliance
with the law with respect to both noncompetitive and competitive
products. Adoption of the ratemaking proposals in H.R. 22 would
increase the ratemaking similarities between the Postal Service and
Canada Post and Australia Post.
In testimony before your Subcommittee on the Postal Service on July
10, 1996, the PRC Chairman noted that proposed legislation to reform
the Postal Service included several proposals that would increase the
Postal Service's flexibility to price its products. He also noted
that under the proposed ratemaking process, provisions for multiple
reconsideration and judicial reviews of rate decisions would be
eliminated. Generally, the Board has adjusted rates every 3 years or
so against a backdrop of an extensive body of public input. Under
H.R. 22, the Board could be adjusting many rates as often as
annually. The PRC Chairman said that the current system of multiple
checks and balances is, in some instances, too much of a good thing.
At the same time, however, he cautioned about going too far in the
opposite direction.
Ratemaking issues were again discussed at a hearing before your
Subcommittee on the Postal Service on April 9, 1997. Witnesses
included economists who helped formulate and design price cap plans
for telecommunications and utility regulatory entities, as well as
experts in antitrust laws, telecommunication regulation, postal
arbitration, and contracts. Differences in opinion among these
witnesses as to how well price caps would work for the Postal Service
indicate that the debate over the Postal Service's pricing system and
the roles of the Board of Governors and PRC have not yet been
resolved among all interested parties. The issue of ratemaking is a
central part of the ongoing congressional deliberations related to
the proposed postal reform legislation (H.R. 22).
--------------------
\11 The Consumer Price Index measures average price change using a
specified market basket representing all goods and services purchased
for everyday living. The index measures the same basket relative to
a designated base period.
\12 Monopoly mail is mail protected by the Private Express Statutes
(laws that restrict the private carriage of letter mail). See our
reports U. S. Postal Service: Pricing Postal Services in a
Competitive Environment (GAO/GGD-92-49, Mar. 1992); and U.S. Postal
Service: Postal Ratemaking in Need of Change (GAO/GGD-96-8, Nov.
1995).
\13 Generally, the terms "noncompetitive mail" and "competitive mail"
are synonymous with "monopoly mail" and "nonmonopoly mail."
\14 The Gross Domestic Product is the value of all final goods and
services produced within the borders of the United States in a given
period, whether produced by residents or nonresidents. The Gross
Domestic Product Chain-Type Price Index is the featured measure of
prices in the national income and products accounts. Changes in the
price level are calculated using the weights of adjacent years.
BOARD'S AUTHORITY TO PAY PMG
---------------------------------------------------------- Letter :4.2
The second most frequently cited issue was the Board's inability to
pay the PMG more than the rate for level I of the Executive
Schedule--currently $148,400.\15
Eight of the 15 interviewees said the Board should be given more
flexibility to compensate the PMG so that pay could be more
comparable with the private sector. One interviewee strongly
disagreed that compensation changes were needed, and the other six
interviewees had no comment on the issue.
The eight interviewees who believed the Board should have more
flexibility to compensate the PMG were concerned that because of the
pay cap, the Board might have a difficult time filling future PMG
vacancies with highly qualified candidates. They were concerned that
many highly qualified candidates might not even consider the position
of PMG because of more financially lucrative positions in the private
sector. These eight interviewees suggested legislative consideration
be given to removing the pay cap on the PMG's pay. As an
alternative, one of the eight interviewees said legislative
consideration should be given to allowing the Board to award the PMG
performance-based bonuses over and above the legislated pay cap.
The one interviewee with an opposing view did not believe the Board
would have a difficult time attracting highly qualified candidates to
the PMG position at the current salary. That interviewee said people
are attracted to the position because of its status and the desire to
serve the public--not because they are seeking a highly paid
position.
Our survey of nine other government-created organizations showed that
the PMG's pay is in line with the reported pay received by the top
officials in those organizations where pay is legislatively capped.
Five of the nine organizations had legislative pay caps similar to
the Postal Service's. Those organizations were TVA, RTB, FDIC,
AMTRAK, and the CPB. However, two organizations--Fannie Mae and
Freddie Mac--were not subject to legislative pay caps. According to
information provided by Fannie Mae and Freddie Mac, the chief
executive officers (CEO) at these two organizations were paid
substantially more than the PMG. Data provided show that in 1995,
the CEOs at Fannie Mae and Freddie Mac were each paid more than $1
million, compared to the $148,400 paid the PMG.
Our ability to make pay comparisons with the CEOs at Canada Post and
Australia Post was limited because both organizations said they
consider this information to be private. Information provided by
Canada Post shows its CEO's pay is set by Canada's Governor in
Council\16 and was in the neighborhood of $200,000 (U.S.) in 1995.\17
Australia Post did not provide specific information on its CEO's pay
but said the pay is set at a level that takes into account both
public and private sector considerations.\18
Executive compensation is, has been, and will likely continue to be,
a hotly debated issue in both the public and private sectors. Recent
literature on executive compensation in the private sector shows the
issue to be sharply focused on the amount of compensation paid
executives in comparison to the health of the company, returns to
investors, and wages paid nonmanagerial employees. For example,
Business Week reported in April 1997 that the average pay increase
for top executives in U.S. companies last year was 54 percent,
compared with an average increase of 3 percent for U.S. factory
workers. It also reported that the average CEO in the United States
was paid 209 times more than the average U.S. factory worker.
According to the literature, the spread in pay between these two
groups has continued to widen since the 1980s. As time passes,
however, more and more private sector executives are reportedly
seeing their compensation challenged by stockholders and employee
unions who perceive the pay of some executives to be exorbitant.
Other attempts are also being made to bring the issues surrounding
executive pay to the forefront. For example, the American Federation
of Labor-Congress of Industrial Organizations (AFL-CIO) launched an
Internet site in April 1997 to give the public ready access to
information on executive compensation for the Fortune 500
companies.\19
Executive pay issues also exist within the public sector. The Senior
Executives Association\20 has cited lifting the 3-year freeze on
Executive Level pay as one of its top priorities. Over time, the
spread in pay between executives and other employees has narrowed.
Along with the pay compression issue, Congress and the administration
have become increasingly concerned about executive compensation in
some government-created organizations and have been taking steps to
address some of those concerns. For example, in October 1995, the
President signed Executive Order 12976 requiring that certain bonuses
paid executives of designated government corporations be preapproved
by the Office of Management and Budget. Additionally, since 1992,
Fannie Mae and Freddie Mac have been prohibited from providing
compensation to any executive officer that is not reasonable and
comparable with compensation for employment in other similar
organizations (including other publicly held financial institutions
or major financial services companies) involving similar duties and
responsibilities. Also, a significant portion of potential
compensation for executive officers must be based on the performance
of the enterprises. Further, Fannie Mae and Freddie Mac are
prohibited from entering into any severance agreement or contract
with an executive officer, unless the Director of the Office of
Federal Housing Enterprise Oversight of the Department of Housing and
Urban Development approves the agreement or contract in advance.
--------------------
\15 By statute, all officers and employees of the Postal Service are
to be paid at a level commensurate with the private sector. However,
that same statute restricts the Board from paying the PMG more than
level I of the Executive Schedule.
\16 The Governor in Council is a special committee of the Cabinet
with responsibility for approving government regulations, including
regulations for setting postal rates. For additional information on
ratemaking at Canada Post, see our report Postal Reform in Canada:
Canada Post Corporation's Universal Service and Ratemaking
(GAO/GGD-97-45BR, Mar. 5, 1997).
\17 Canada Post reported that its salary information is private.
However, it stated that in fiscal year 1995, the head of Canada Post
was paid somewhere in the range of $189,000 to $233,000 (U.S.
dollars).
\18 The PMG, in commenting on a draft of this report, provided
additional information on CEO pay at nine foreign postal
administrations, including Canada Post and Australia Post. See
appendix V for additional information. We did not independently
verify the information provided.
\19 See http://aflcio.paywatch.org
\20 The Senior Executives Association was founded in 1980 as a
tax-exempt, nonprofit corporation representing career federal
executives. The Association concerns itself with those issues that
affect the career executive service as a whole.
BOARD MEMBERS' PAY
---------------------------------------------------------- Letter :4.3
Although 12 of the 15 interviewees believed Board members' pay was
another area warranting legislative attention, there was substantial
disagreement on the specific issues and possible legislative
remedies. Some interviewees thought Board members' pay should be
increased, while others thought compensation should not be increased
because Board service should be considered public service. Others
thought the daily meeting attendance fee should be increased. Others
thought periodic reviews of Board members' pay should be required,
and varying combinations of these changes were also offered for
consideration.
Six of the 15 interviewees said that even though Board members'
salaries were increased from $10,000 to $30,000 in 1996, they were
still below private sector salaries and should be made more
comparable. Five of the 15 interviewees also believed the law should
be changed to increase the $300 daily fee members are paid for
attending Board meetings. Interviewees who suggested legislative
change were particularly concerned that there is no legal requirement
that pay be reviewed on a periodic basis, and they pointed out that
the time span between the last two pay increases was 26 years.
Seven interviewees, however, said Board members' salaries should not
be increased, and four said daily meeting attendance fees should not
be increased. Two interviewees did not comment on Board members'
salaries, and six did not comment on daily meeting attendance fees.
Interviewees opposing these suggested legislative changes were
generally of the opinion that Board service should be recognized as
public service and that Postal Service Governors should not expect
compensation similar to that found on private sector boards.
Our comparison of Postal Governors' pay with the reported pay of
board members of nine other government-created organizations did not
show major disparities. In fact, we identified only two notable
differences. First, board members at Fannie Mae and Freddie Mac may
elect to receive shares of stock in lieu of cash compensation.
Second, board members at TVA and FDIC are paid more than Postal
Service Governors, but they serve full time. None of the
interviewees believed Postal Board Governors should serve full time.
As discussed earlier, compensation is an area of contention in both
the public and private sectors. Board members' compensation, like
CEOs' compensation, is currently being examined from different angles
by various interest groups--e.g., stockholders and employee unions.
Work done by Spencer Stuart, a company that tracks board trends and
practices at 100 major American corporations, showed that private
sector board members' annual salaries and meeting attendance fees
averaged $55,300 in 1996 (ranging from $25,000 to $100,000).\21 This
compares to compensation of about $38,000 that the Postal Service
Governors will likely receive in 1997 (salary plus the historical
average of daily meeting attendance fees).
--------------------
\21 This does not include additional stock that was awarded board
members at 41 of the 100 corporations.
QUALIFICATION REQUIREMENTS
FOR BOARD MEMBERSHIP
---------------------------------------------------------- Letter :4.4
The final issue cited by a majority of current and former members as
needing legislative attention was the lack of well-defined
qualification requirements for Board appointments. Eight of the 15
interviewees stated that the statutes governing Board appointments
are too general and should be more precisely defined. Seven of the
interviewees, however, said no legislative change should be made in
the appointment process. They were generally of the opinion that the
current process, which requires Senate confirmation, ensures that
highly qualified candidates are appointed to the Board.
The eight interviewees who favored more precisely defined
qualification requirements believed that, historically, appointments
to the Board have not always been based on an individual's
demonstrated ability to govern large corporations like the Postal
Service. They were concerned that because qualification requirements
are not clearly defined in law, the Board may not always have the
most appropriate mix of skills for effectively managing an
organization as big and as complex as the Postal Service. The
interviewees suggested a number of legislative changes that they
believed could enhance the appointment process. These included
having an independent body make recommendations for Board
appointments and delineating, in law, specific requirements for Board
service. Examples of specific requirements mentioned included (1)
requiring that appointees have corporate experience, (2) requiring a
mix of geographic representation on the Board, and (3) requiring
labor and mailing industry representation on the Board.
The statutory restrictions/qualifications for board service at six of
the other nine government-created organizations included in our study
were more specific than the Postal Service's. For example, at Fannie
Mae and Freddie Mac, four of the five presidential appointees to the
board must have specific business backgrounds: one must be from the
mortgage lending industry, one must be from the home building
industry, one must be from the real estate industry, and one must be
from an organization representing consumer interests. At the CPB,
statutes require that the nine appointed board members be selected
from such fields as education, cultural and civic affairs, or the
arts. Board members are also to represent various regions of the
nation and professions, occupations, and various kinds of talent and
experience appropriate to the function and responsibilities of the
CPB. Additionally, of the nine board members, one is to be selected
from among individuals who represent the licensees and permittees of
public television stations, and one is to represent the licensees and
permittees of public radio stations. Australia Post and AMTRAK
statutes require that at least one board member have an understanding
of employee issues. The RTB statutes require that of the Bank's 13
board members, 3 be elected by stockholders of eligible cooperative
borrowers, and 3 be elected by stockholders of eligible commercial
borrowers.
The statutory qualifications for board service at the other three
government-created organizations included in our study (TVA, FDIC,
and Canada Post) were similar to the Postal Service's qualifications
in that they were generally nonrestrictive. For example,
requirements for board membership at FDIC state only that the three
appointed members must be U.S. citizens and that no more than three
of the five board members may be members of the same political party.
Additionally, like the Postal Service, three of the other nine
government-created organizations included in our study have
provisions for ex officio membership on their boards. At the Postal
Service, the PMG and DPMG are ex officio members of the Board. At
the RTB, there are five ex officio members--all from the Department
of Agriculture. Ex officio members on the FDIC board include the
Comptroller of the Currency and the Director of the Office of Thrift
Supervision. Additionally, one of the presidentially appointed
members also serves as the chair of the board and full-time head of
FDIC. The Secretary of Transportation and AMTRAK president serve as
ex officio members on AMTRAK's board.
Current literature on private sector governance suggests that some
aspects of corporate governance have been undergoing changes in
recent years. Some stockholders, concerned with publicized instances
of excessive executive compensation, coupled with unacceptable
corporate performance, are increasingly scrutinizing governance
issues, including the qualifications of board members. An article in
the spring 1995 issue of Business Quarterly points to a lack of
meaningful qualifications for board members and a lack of needed
expertise and knowledge as two areas that could signal competence
problems affecting board performance.\22 The article goes on to point
out that healthy boards require, among other things, a balance of
qualifications, knowledge, skills, attitudes, and experiences.
Business literature suggests that now, more so than in previous eras,
corporations are developing more well-defined criteria for board
membership--acknowledging that various roles on the board may require
various backgrounds and skills.
Although conceptually it may be desirable to have board
representation for all stakeholders, it presents a real challenge to
do so within the Postal Service structure. The Postal Service,
unlike many other corporate and corporate-like organizations, has
numerous stakeholders with widely varying interests and concerns,
e.g., rural patrons, inner-city patrons, business mailers, six labor
unions, and three management associations. If qualification
requirements are changed, one challenge for Congress will be
determining what qualifications or special interests, if any, should
be represented on the Board.
--------------------
\22 Donald H. Thain and David S. R. Leighton, "Why Boards Fail,"
Business Quarterly (Spring 1995), p. 71.
AREAS WHERE SOME, BUT LESS THAN
A MAJORITY OF, INTERVIEWEES
BELIEVED LEGISLATIVE ATTENTION
IS NEEDED
------------------------------------------------------------ Letter :5
In our discussions with current and former members of the Postal
Service Board of Governors, we also identified areas where some, but
less than a majority of, interviewees believed legislative attention
is needed. Those areas were (1) the Board's mission and
responsibilities, (2) the Board's relationship with postal
management, (3) the Board's accountability and performance measures,
and (4) the Board's composition and structure.
Additionally, our review of pertinent literature indicated that
others have expressed concerns within these same four areas as they
relate to government-created organizations in general. A recurring
theme in this literature focuses on accountability. For example, in
April 1995,\23 the Congressional Research Service reported that a key
issue for policymakers is how to make government corporations
politically accountable for their policies and operations while still
giving them the necessary financial and administrative discretion to
function in a commercial manner. An article in the February 1995
issue of Government Executive also expressed concern that
quasi-government organizations are largely unaccountable for their
actions.\24
Some of the current and former Postal Service Board members we spoke
with had the following specific concerns in these four areas. Also,
where applicable, we have included as part of our discussion other
related issues identified as part of our literature search.
--------------------
\23 See S. Prt. 104-18, April 1995.
\24 Clyde Linsley, "Government Inc.," Government Executive (Feb.
1995).
BOARD MISSION AND
RESPONSIBILITIES
---------------------------------------------------------- Letter :5.1
Six interviewees cited the Board's mission and responsibilities as an
area needing legislative attention. Concerns in this area centered
on two issues. One issue was the Board's uncertainty as to how far
it should go in letting the Postal Service compete and operate like a
private sector corporation. The other issue concerned the limited
specificity in law concerning the Board's oversight responsibilities.
Four of the six interviewees said that uncertainties about how far
the Postal Service should go in competing with the private sector are
not helped by the Postal Service's current legal designation. By
law, the Postal Service is designated as an independent establishment
in the executive branch. One interviewee characterized this
situation by saying that the Postal Service's current legal
designation places it in the unenviable position of being "neither
fish nor fowl," i.e., neither an executive agency nor a private
corporation. The four interviewees suggested that Congress consider
clarifying the Postal Service's legal designation, which, in turn,
should provide a clearer picture of the Service's mission.\25
Legal status questions are not unique to the Postal Service. Such
questions are being raised with regard to government-created
organizations in general. Unclear legal definitions are
disconcerting to some, while others use it to their advantage. For
example, a fellow at both the National Academy of Public
Administration (NAPA) and the Johns Hopkins Center for the Study of
American Government said government-created organizations can
generally choose whatever legal status best suits their purposes.\26
He cited a 1977 incident in which the Secretary of Housing and Urban
Development instructed Fannie Mae to increase its mortgage purchases
in the inner cities. Fannie Mae replied that, as a private agency,
its principal obligation was to its stockholders, who would object to
its investing in riskier properties. A few years later, however,
when the administration attempted to strip away some of Fannie Mae's
special privileges, such as its tax exemptions, Fannie Mae responded,
"Congress established Fannie Mae to run efficiently as an agency, not
as a fully private company." Without those special relationships,
Fannie Mae said, it would not be able to survive.
While discussing the Postal Service Board's mission and
responsibilities, four of the six interviewees said the Board could
benefit from more detailed guidance concerning its oversight
responsibilities. They suggested that Congress consider making the
law more specific. They were concerned that the broad guidance
currently in law does not always provide them with a good basis for
knowing Congress' desires as the Postal Service moves toward the 21st
century.
--------------------
\25 Seven of the nine interviewees who did not believe legislative
attention was needed to clarify the Board's mission and
responsibilities specifically stated that they were opposed to
changing the Postal Service's legal designation.
\26 Clyde Linsley, "Government Inc.," Government Executive (Feb.
1995).
BOARD RELATIONSHIP WITH
POSTAL MANAGEMENT
---------------------------------------------------------- Letter :5.2
Five interviewees cited the Board's relationship with postal
management as an area needing legislative attention. The most
frequently cited issue related to perceptions that the position of
Chief Postal Inspector did not have all the independence necessary.
Four of the five interviewees said that to help ensure the Chief
Postal Inspector's independence, he/she should be appointed by the
Board and be directly accountable to the Board--similar to the status
of the Postal Service's recently appointed Inspector General. They
said the Chief Postal Inspector should not be appointed by, or be
considered part of, management.
The five interviewees also had three other suggestions for
legislative consideration in this area, but no one suggestion was
cited by more than two of the interviewees. The specific suggestions
included the following.
-- The Postal Service's General Counsel should be appointed by the
Board and be directly accountable to the Board--similar to the
suggestion concerning the Chief Postal Inspector.
-- The law should require that the PMG be appointed from within the
Postal Service. This suggestion stemmed from the belief that
the Postal Service's size and complexity makes it very difficult
for an outsider to be an effective Postmaster General during the
early years of his/her appointment.
-- The PMG and DPMG should be allowed to vote on all matters that
come before the Board, except for personnel matters relating
directly to them. This suggestion was made to make the PMG and
DPMG a more integral part of the Board. Currently, the PMG and
DMPG are prohibited from voting on some issues that come before
the Board, e.g., increases in postage rates.
BOARD ACCOUNTABILITY AND
PERFORMANCE MEASURES
---------------------------------------------------------- Letter :5.3
Six interviewees cited Board accountability and performance measures
as another area needing legislative attention, although no one issue
was cited by more than two of the interviewees. Specific suggestions
for legislative consideration included the following.
-- Periodic peer reviews should be required as a prerequisite for
continued service on the Board.
-- The fiduciary responsibilities of Board members should be more
clearly delineated in law--particularly in light of the Postal
Service's current legal status.
-- Specific actions for which the Board will be held accountable
should be clearly delineated in law.
-- A mechanism should be established for removing nonproductive
Board members. One of the interviewees, however, cautioned
against such an action, citing the potential for abuse.
Although the interviewees discussed accountability from a boardroom
perspective, it is, in fact, a topic pertinent to all facets of
organizational life. As discussed earlier, accountability is an
issue being grappled with as the government examines its corporations
and corporation-like organizations. Defining accountability in
government begins with clearly establishing who is accountable to
whom, and for what.
BOARD COMPOSITION AND
STRUCTURE
---------------------------------------------------------- Letter :5.4
Four interviewees cited Board composition and structure as an area
needing legislative attention, but no one issue was cited by more
than two of the interviewees. Specific suggestions for legislative
attention included the following.
-- The current 9-year appointments to the Board are too long and
should be shortened. Appointments should be made more
comparable to the private sector, where terms are generally for
no more than 3 years.\27
-- Board members should be prohibited from serving more than one
term.
-- Former Postal Service employees should be prohibited from
serving on the Board.
-- The process for selecting a Chair should be changed. The Chair
should be appointed by the president rather than elected by the
Board.
-- The PMG should be designated, in law, as the permanent Chair of
the Board.
-- The law should be clarified to explicitly state that the PMG can
be elected Chair by the members.
-- Management should have only one, not two, seats on the Board.
--------------------
\27 Five of the 15 interviewees, however, specifically said they were
opposed to shorter terms. They thought 9-year terms were appropriate
given the amount of time required to become well versed in postal
issues.
AREAS WHERE NONE OF THE
INTERVIEWEES BELIEVED
LEGISLATIVE ATTENTION IS NEEDED
------------------------------------------------------------ Letter :6
There were two areas discussed where none of the current or former
Board members interviewed believed legislative attention is needed.
These areas were (1) Board staffing and (2) the Board's legal status.
All of the interviewees agreed that Board staffing was an internal
management issue and not an issue warranting legislative attention.
They said the Board has the authority to hire as many staff as it
needs to fulfill its responsibilities. Most individuals believed
that the current staff, consisting of two professionals and two
administrative staff, is adequate. However, four interviewees
believed that the Board should consider expanding its staff to
include experts in such areas as real estate, finance, and
ratemaking. Nevertheless, they agreed that any decision to hire
additional staff should be made by the Board itself, not by
legislative fiat.
Additionally, current and former Board members we spoke with saw no
need for legislative action to change the Board's legal status. The
Board of Governors is part of the Postal Service and does not have a
separate legal status. Nevertheless, discussion of the Board's legal
status prompted several interviewees to reiterate their concerns
about the Postal Service's legal status. As noted earlier, some
interviewees believed that the current legal definition of the Postal
Service--an independent establishment of the executive branch--is
unclear and causes uncertainties about how far the Postal Service can
go in competing with the private sector.
AGENCY COMMENTS
------------------------------------------------------------ Letter :7
The PMG and the Chairman of the Postal Service Board of Governors
provided written comments on a draft of this report. The PMG said
most of the issues raised in the report speak for themselves and have
been discussed by the Governors and PMGs for many years. His
comments also included supplemental information on compensation
practices at TVA and CEO pay at nine foreign postal administrations
plus the USPS. His comments are reproduced in appendix V.
The Chairman of the Postal Service Board of Governors said in his
written comments that the report provides valuable information on
governance issues and how other boards function. He also said many
of the issues raised in the report have been discussed by the various
Boards of the Postal Service over the years. His comments are
reproduced in appendix VI.
Program personnel at the nine other organizations included in this
report for comparison purposes were provided copies of a draft of
appendix IV for their review and comment. The program personnel at
two of the nine (AMTRAK and CPB) organizations said the information
was accurate as presented. Program personnel at the other seven
organizations either provided additional information or made
technical suggestions that have been incorporated into the appendix
as appropriate.
---------------------------------------------------------- Letter :7.1
We are sending copies of this report to the Ranking Minority Member
of your Subcommittee, the Chair and Ranking Minority Member of the
Senate oversight subcommittee, the Postal Service Board of Governors,
the PMG, and other interested parties. Copies will also be made
available to others upon request.
Major contributors to this report are listed in appendix VII. If you
have any questions about the report, please call me on (202)
512-4232.
Sincerely yours,
Bernard L. Ungar
Director, Government Business
Operations Issues
DESCRIPTIONS OF VARIOUS
GOVERNMENT-CREATED ORGANIZATIONS
=========================================================== Appendix I
The organizations we selected to compare with the Postal Service
Board of Governors are generally identified as wholly-owned
government corporations, mixed-ownership government corporations,
GSEs, or federally created private corporations. In addition, we
compared the boards of two selected foreign postal administrations
with the Board of Governors of the Postal Service.
Although there is no authoritative definition for the term
"government corporation," there are certain characteristics common to
government corporations that were identified by President Truman in
1948 and that have been referred to and accepted over the years by
public administration experts. According to President Truman, a
corporate form of organization is appropriate for the administration
of government programs that are predominately of a business nature,
produce revenue and are potentially self-sustaining, involve a large
number of business-type transactions with the public, and require a
greater flexibility than the customary type of appropriations budget
ordinarily permits.
In 1981, NAPA defined a wholly-owned government corporation as a
corporation pursuing a government mission assigned in its enabling
statute, financed by appropriations, with assets owned by the
government and controlled by board members or an administrator
appointed by the president or a department secretary. It defined a
mixed-ownership government corporation as a corporation with both
government and private equity, with assets owned and controlled by
board members selected by both the president and private
stockholders, and as usually intended for transition to the private
sector.\28 Of the organizations selected for this study, TVA and the
RTB are wholly-owned government corporations, and FDIC and AMTRAK are
generally considered to be mixed-ownership government corporations.
GSEs are federally established, privately owned corporations designed
to increase the flow of credit to specific economic sectors. GSEs
typically receive their financing from private investment, and the
credit markets perceive that GSEs have implied federal financial
backing. GSEs issue capital stock and short- and long-term debt
instruments, issue mortgage-backed securities, fund designated
activities, and collect fees for guarantees and other services. GSEs
generally do not receive government appropriations. Fannie Mae and
Freddie Mac are two examples of GSEs.
The CPB is a federally created private, nonprofit corporation. It
does not consider itself to be a government corporation or a GSE.
However, it does receive at least some of its operating funds from
yearly federal appropriations and has been considered to be a
government corporation by others.
--------------------
\28 See Report on Government Corporations, Vols. I-II (Washington,
D.C.: NAPA, 1981).
CURRENT AND FORMER POSTAL SERVICE
BOARD MEMBERS INTERVIEWED
========================================================== Appendix II
Name Position(s) held Date(s) of appointment
---------------------- ---------------------- ----------------------
Susan E. Alvarado Current Governor July 1988
Winton M. Blount Former PMG January 1969
Former Board Chair July 1971
Michael Coughlin Current DPMG January 1987
LeGree S. Daniels Current Governor August 1990
Einar V. Dyhrkopp Current Governor November 1993
S. David Fineman Current Governor May 1995
Anthony M. Frank Former PMG February 1988
Tirso del Junco Current Board Chair July 1988, Reappointed
December 1991
Bert H. Mackie Current Governor December 1988
Ned R. McWherter Current Governor October 1995
Norma Pace Former Governor May 1987
Robert F. Rider Current Governor May 1995, Reappointed
June 1996
Marvin Runyon Current PMG July 1992
Robert Setrakian Former Governor December 1985
Sam Winters Current Governor November 1991
----------------------------------------------------------------------
INTERVIEW GUIDE
========================================================= Appendix III
RELATIONSHIP BETWEEN PMG AND BOARD
1. Are you satisfied with the statutory relationship between the PMG
and the Board? If not, why? Should anything be changed in
law/regulation?
2. Aside from the statutory/regulatory relationship between the PMG
and the Board, are there other issues dealing with the relationship
that you would like to see addressed? If so, please explain your
position and cite examples.
BOARD'S RELATIONSHIP TO PRC
1. Are you satisfied with the Board's statutory relationship with
PRC? If not, why? Should anything be changed in law/regulation?
2. Do you believe PRC provides the Board with sufficient information
to meet the Board's needs? Is information provided in a timely
manner?
If the information is not sufficient and/or timely, what changes do
you believe are needed?
BOARD'S MISSION AND
RESPONSIBILITIES
1. How does the Board get involved in setting goals and developing
implementation strategies for the Postal Service?
2. Are you satisfied with the Board's mission and responsibilities
as specified in legislation? If not, why?
3. Are you satisfied with the Board's mission and responsibilities
as further defined by the Bylaws? If not, please cite examples and
discuss any changes you believe are needed.
BOARD'S AUTHORITY
1. Are there any statutory authorities the Board does not have that
you believe it should have? If so, please explain.
2. Are there any statutory authorities the Board has that need to be
expanded or contracted?
BOARD'S LEGAL STATUS
1. Is the Board's legal status satisfactory, or are legislative
changes needed? If so, what changes are needed and why? Provide
examples supporting the need for any change in the legal status of
the Board.
BOARD'S ACCOUNTABILITY AND
PERFORMANCE MEASURES
1. Do you believe there are Board accountability issues that need to
be addressed with regard to the Board as a collective unit? If so,
what are those issues?
2. To whom are individual Board members accountable?
3. Are there accountability issues that need to be addressed with
regard to the performance of individual Board members? If so, what
are those issues?
4. In general, how are ethical or conflict of interest issues
addressed? Are you satisfied with the guidance available in this
area?
BOARD'S COMPENSATION
1. Is the new pay level adequate? If not, please explain why.
2. Do you believe benefits are adequate in relation to other boards
(other board directors may receive stock options, health insurance,
life insurance, etc.)? If not, how should they be adjusted?
3. Are travel reimbursements adequate? If not, where do they fall
short?
BOARD'S COMPOSITION/QUALIFICATIONS
1. Do the current size and composition of the Board allow the Board
to effectively perform its duties?
2. Are the qualifications/restrictions for Board membership
adequate, or should more specific qualifications be spelled out in
legislation? If more specific qualifications are needed, please
state why and cite examples of how more specific qualifications would
have been helpful in past situations.
3. Do you serve on any other boards? If so, how many and which
ones?
Do you believe there should be a limit on the number of boards on
which members can serve?
4. Should service on the Postal Service Board of Governors be
changed from part time to full time? Explain.
BOARD STAFF
1. Do you believe that the Board has sufficient staff resources? If
not, what additional staff are needed (numbers, qualifications,
etc.)?
SELECTED CHARACTERISTICS OF THE
POSTAL SERVICE'S BOARD OF
GOVERNORS AND OTHER BOARDS
========================================================== Appendix IV
Organization
the board Australia
directs USPS Fannie Mae Freddie Mac TVA RTB FDIC AMTRAK CPB Canada Post Post
--------------- ---------------- ---------------- ---------------- ---------------- -- ------------- ------------- ------------- ------------- ------------- -------------
Organization background
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Legal status Independent Government- Government- Wholly-owned Wholly-owned Mixed- Mixed- Private, "Parent Crown Federal
establishment of sponsored sponsored government government ownership ownership nonprofit Corporation" government
the executive enterprise enterprise corporation corporation\a government government corporation (fully owned business
branch of the corporation corporation organized by the Crown) enterprise
United States under D.C. (fully owned
government law by the
Commonwealth
Government of
Australia)
Legal authority Postal Federal National Federal Home Tennessee Valley 7 U.S.C. 941- 12 U.S.C. 49 U.S.C. 47 U.S.C. 396 Canada Post Australia
Reorganization Mortgage Loan Mortgage Authority Act of 950b 1811-1835a 240101 et et al. Corporation Postal
Act of 1970 and Association Corporation Act, 1933 and seq. (CPC) Act Corporation
amendments Charter Act, as as amended amendments 1980 and Act of 1989
amended amendments and
[39 U.S.C.] [12 U.S.C. 1451- [16 U.S.C. 831- amendments
[12 U.S.C. 1716- 1459] 831dd] [CPCA 1980-
1723d] 81-82-83,
c.54 and
amendments]
Created July 1, 1971 June 27, 1934 July 24, 1970 May 18, 1933 May 7, 1971 June 16, 1933 March 30, March 27, October 16, January 1,
1971 1968 1981 1989\b
Mission/ To provide To provide To provide To improve the To obtain an To insure To provide To facilitate To establish To supply
purpose postal services stability in the stability in the navigability of adequate deposits of intercity and the full and operate a postal
to bind the secondary market secondary market the Tennessee supply of banks and commuter rail development postal services
nation through for residential for residential River; provide supplemental savings passenger of public service for within
the personal, mortgages; mortgages; for flood funds, to the associations. transportatio telecommunica the Australia and
educational, respond respond control, extent n in the tions. collection, between
literary, and appropriately to appropriately to reforestation, feasible, United transmission, Australia and
business the private the private the proper use from States. and delivery places
correspondence capital market; capital market; of marginal nonfederal of messages, outside
of the people; provide ongoing provide ongoing lands, and the sources to information, Australia.
and to provide assistance to assistance to agricultural and (1) make funds, and Australia
prompt, the secondary the secondary industrial loans to goods both Post is also
reliable, and market for market for development of corporations within Canada able to carry
efficient residential residential the Tennessee and public and between on any
service to mortgages mortgages Valley; provide bodies for Canada and business or
patrons in all (including (including for the national the purpose places activity,
areas and to activities activities defense; and of financing outside either in
render postal relating to relating to provide an ample or Canada; Australia or
services to all mortgages on mortgages on supply of refinancing manufacture overseas,
communities. housing for low- housing for low- electric power the and provide relating to
and moderate- and moderate- to seven-state construction, such products the supply of
income families income families region in the improvement, and to postal
involving a involving a southeastern expansion, provide such service.
reasonable reasonable United States. acquisition, services as
economic return economic return and operation are, in the Australia
that may be less that may be less of telephone opinion of Post may also
than the return than the return lines, the carry on any
earned on other earned on other facilities, Corporation, business or
activities) by activities) by and systems; necessary or activity that
increasing the increasing the and (2) incidental to is
liquidity of liquidity of conduct its the postal conveniently
mortgage mortgage operations, service carried on by
investments and investments and to the extent provided by use of
improving the improving the practicable, the resources not
distribution of distribution of on a self- Corporation; immediately
investment investment sustaining and provide required in
capital capital basis. to or on performing
available for available for behalf of the principal
residential residential departments function or
mortgage mortgage and agencies in the course
financing; and financing; and of, and of performing
promote access promote access corporation the principal
to mortgage to mortgage owned, function.
credit credit controlled,
throughout the throughout the or operated
nation nation by, the
(including (including Government of
central cities, central cities, Canada or a
rural areas, and rural areas, and provincial,
underserved underserved regional, or
areas) by areas) by municipal
increasing the increasing the government in
liquidity of liquidity of Canada or to
mortgage mortgage any person
investments and investments and services
improving the improving the that, in the
distribution of distribution of opinion of
investment investment the
capital capital Corporation,
available for available for are capable
residential residential of being
mortgage mortgage conveniently
financing. financing. provided in
the course of
carrying out
the other
objects of
the
Corporation.
Board authority
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Description of Postal rates are The Board has Freddie Mac's TVA's board has The only The board has The board has The board has The board, The board
board's determined in unilateral charter exclusive product of unilateral unilateral the authority directly or sets prices
authority to conjunction with authority to explicitly authority to set RTB is loans. authority to authority to to approve indirectly for all
set prices, a Postal Rate conduct business provides that prices, rates, Loans are to grant or deny set prices, prices; through products and
rates, etc. Commission (PRC) operations, but Freddie Mac has etc., for the be made in deposit rates, etc., however, it delegation of services. The
recommendation. generally day- full discretion products or accordance insurance to without has no authority to board must
The Governors to-day business in setting services that with the financial review or products to the notify the
may approve a activities are prices and other TVA sells. requirements institutions. approval by sell. President/ Minister of
PRC-recommended delegated to business The TVA act contained in Board an Specifically, CEO, oversees any intention
change; accept management operations. contains the Rural decisions are independent CPB is not a virtually all to alter the
recommended subject to standards for Electrificati not subject regulatory commodity rate-making price of the
change under provisions of There are no determining on Act, to approval authority. business. decisions. standard
protest; reject charter. regulatory or appropriate Section by another The board, in postal rate
or, in limited other external levels for TVA's 408(a). regulatory delegating (the reserved
circumstances, limits on the electric power Interest authority. its service), and
modify authority of rates but rates are authority, the Minister
recommended Freddie Mac's commits the determined by has has the
change. management to fixing of those a formula set established opportunity
set prices for rates to the by law in the that (1) all to disallow
PRC is an mortgages it discretion of Act, Section rates it.
independent purchases and the TVA board 408(b). established
agency that acts the securities and precludes through The
upon requests it issues. judicial review The U.S. regulation Australian
from the USPS or thereof.\ Department of (i.e., Competition
in response to Agriculture noncompetitiv and Consumer
complaints filed With one Rural e products) Council,
by interested exception, no Utilities require while having
parties. Among statutory Service is approval of no direct
its major provision responsible the board, authority
responsibilities authorizes for the day- (2) all over the
are to submit another person, to-day generic rates price, has
recommended board, or operation of (rates the
decisions to the commission to RTB, and available to opportunity
USPS on postage set or review Congress anyone to consider
rates and fees prices.\c maintains meeting any proposal
and mail regulatory specified and make its
classifications, authority. terms and views known
issue advisory conditions) to the
opinions to the established Minister as
USPS on proposed outside of part of his/
nationwide regulation her
changes in require the consideration
postal services, President/ of proposed
and submit CEO's price
recommendations approval, and alterations.
for changes in (3) all sales
the mail agreements
classification (generic or
schedule. non-generic)
are subject
to the
board's
delegation of
authority
instrument
and related
processes.
Does board set Yes, Governors Yes, the Board Yes, the Board Yes, the board No. No, the pay Yes. Yes, but No, the CEO's Yes.
pay for CEO? set pay of the is authorized to of Directors sets of the Chair president may pay is set by
PMG, subject to fix compensation determines compensation for of the Board not be Governor in
limitations of for the officers compensation of all TVA ("CEO") is compensated Council.
39 U.S.C. of the officers. employees. determined by at an annual
1003(a); i.e., Corporation. Salary for reference to rate of pay
salary cannot regular Federal that exceeds
exceed the rate employees may Statutes-- the rate of
for Level I of not exceed that Level III of basic pay in
the Executive received by the Executive effect from
Schedule. board members. Schedule. time to time
for Level I
of the
Executive
Schedule
under Sec.
5312 of Title
5.
Does board set Yes, subject to Yes, the Board Yes, the Board Yes, the board No. Yes. Yes, under 49 Yes. No, benefits Yes.
benefits for restrictions of is authorized to of Directors sets U.S.C. are set by
CEO? Federal fix compensation determines compensation, 24303(b). the Governor
Retirement and for officers of benefits of including in Council.
Workers the Corporation. officers. benefits, for
Compensation all appointees.
Laws.
CEO $148,400 $800,000 salary; $865,000 Not applicable. Annual The Chair's The CEO's $148,400 This is not Not publicly
compensation $833,263 bonus; salary; compensation total pay and compensation considered available.\e
(FY95)\d and $394,000 bonus; is to conform benefits does not public
$23,102 other and to provisions compensation exceed the information.\ Terms and
annual $100,688 other of the for FY95 was Federal e conditions
compensation, as annual federal $147,014.74. Executive are set at a
well as long- compensation, as executive Level I However, the level that
term well as long- salary salary CPC Board takes into
compensation in term schedule. scale. contact account both
the form of compensation in provided a public and
stock awards and the form of $108,200 The CEO range of private
securities restricted stock salary and receives the salary that sector
options. awards and approximately following is public: consideration
securities 20% of that benefits: $189,000 to s. Prior
options. for benefits health $233,000 consultation
for the insurance, an (U.S. with the
Administrator employer- dollars). Remuneration
of Rural paid Tribunal is
Utilities retirement The benefit part of the
Services, who income plan, package is process of
serves as the a 401(k) worth about establishing
CEO of the retirement 20% of a package.
telephone savings plan, salary.
bank. life and
accidental
death and
disability
insurance,
split dollar
life
insurance,
business
travel
accident
insurance,
short-term
and long-
term
disability
benefits,
United States
Railroad
retirement
benefits as
well as paid
vacation and
sick leave,
rail pass
privileges,
educational
assistance,
parking, and
relocation
benefits.
Board compensation
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Description of For Governors, Board advised by Pursuant to a Salary of TVA Determined by Salary is Pay and By statute. Determined by Determined by
how salaries salary and outside experts resolution Board Chair is statute. determined expenses are the Governor an
and benefits reimbursable on appropriate adopted by the established under federal set by in Council. independent
for Board expenses levels of board, the 15 under Level III statutes -- statute. central
members are determined by compensation outside of the Executive Level III of remuneration
determined and statute. based on directors Schedule Salary. the Executive tribunal.
approved payments made by receive an Schedule for
Governors comparable annual retainer, The salary of Chairperson
determine pay of businesses. annual award of the other two and Level IV
PMG and DPMG stock options members of the for other
within and restricted TVA board is members.
legislatively stock, and established
established meeting under Level IV
parameters. attendance fees. of the Executive
Schedule.
They do not Benefits
receive salaries available to
or other board members
employee are those
benefits. generally
available to
federal
employees,
including
presidential
appointees, by
statute.
Description of Governors' Generally annual Board members The Chairman and Salaries and Board Adjustment Salaries and Increases are The
how increases salaries are set adjustments. receive cash two directors of benefits have members' would require benefits may not made on a Remuneration
in salaries and by legislation. fees and stock the TVA board not been salaries are legislative be changed by regular Tribunal
other benefits From 1970 to Board is advised awards as their are positions increased set by change. an act of basis. They regularly
occur 1995, there were by outside compensation. covered by level since statute (5 Congress at are made examines
no salary experts on Adjustments for III and level establishment U.S.C. 5314 any time. following a remuneration
increases. In appropriate inflation are IV, of Board in and 5315) recommendatio levels and
1996, salaries levels of not included in respectively, of 1971. under n from the will consult
were increased compensation the criteria for the Executive Adjustments appropriate Minister with the
by legislation. based on setting Schedule (5 would be made executive responsible board on
payments made by compensation. U.S.C. 5314 and legislatively levels. for Canada specific
PMG and DPMG comparable However, from 5315). . Changes would Post to the issues.
salaries are set businesses. time to time Increases in pay be done Governor in
by the Freddie Mac are done through legislatively Council. The
Governors, reviews the the legislative . last
subject to a pay compensation process. adjustment
cap. package for was made by
board members to the Governor
Increases in pay ensure that it in Council in
are done through remains 1990.
the legislative competitive.
process.
Is member Full time for Full time for 3 Part time. Board Full time Part time Full time Part time Part time Part time Full time for
service full or PMG and DPMG. management members provide Managing
part time? employees and service year Director and
Part time for part time for round. There is part time for
Governors. rest of board, no fixed-hour other
who are outside requirement for Directors.
management service.
directors.
Current annual $30,000 plus $23,000 retainer $20,000 retainer Effective Board members $123,100 for Board members $150 a day $437 (U.S. Directors--
salary of board $300 a day for annually, plus annually, January 1, from the Chair receive $300 while dollars) for $27,650 (U.S.
members not more than 42 $1,000 for prorated based 1996: general per diem for attending physical dollars)
days of meetings attending each on the quarter public and $115,700 for attending meetings or attendance at
per year for board or board in which they $115,700 for elected other board board and while engaged board or Deputy Chair-
Governors. committee were appointed. Board members members members committee in duties board -$37,750
meeting. receive $100 meetings or related to committee (U.S.
$148,400 salary Directors also $123,100 for each day (or Board service conducting such meetings meetings. dollars)
for PMG Committee chairs were paid $1,000 Chairman part thereof) is full time; other or other
received an for attendance for up to 50 therefore, no official activities of The $437 Chair--
$148,000 salary additional $500 at each meeting Board service is days per daily meeting business of the board, (U.S. $58,700 (U.S.
for DPMG for each of the board or full time; year, spent attendance the including dollars) is dollars)
committee any board therefore, no in the fees paid. Corporation. travel time. also payable
meeting they committee daily meeting performance for each full No daily
chaired.\ meeting and were attendance fees of their The $300 per No board day of travel meeting
reimbursed for paid. official diem is a member shall to and from attendance
Additionally, out-of-pocket duties. fixed receive the meeting. fees paid.
each costs of statutory compensation
nonmanagement attending such Federal compensation of more than Board members
director has meetings. employees level that $10,000 in are paid an
restricted appointed to has been in any fiscal annual
common stock Each board the Board place since year. retainer
under the Fannie committee receive no the board was ($4,080 to
Mae Restricted chairman also additional created. $5,100 U.S.
Stock Plan for received an compensation dollars) that
Directors and annual retainer for serving is set by
stock options of $2,500. on the Order-in-
under the Fannie Board. Council
Mae Stock Pursuant to the (i.e., by Her
Compensation 1995 Directors' Majesty's
Plan of 1993. Stock Government)
Fannie Mae Compensation on the
officers who Plan,\f each recommendatio
serve on the Director was n of the
Board of granted options responsible
Directors do not to purchase Minister.
receive 2,400 shares of
compensation for the
serving as Corporation's
directors other common stock and
than the received shares
compensation of restricted
they receive as stock having a
Fannie Mae fair market
officers. Fannie value of
Mae officers are approximately
not eligible to $10,000 on the
participate in date of the
the Fannie Mae award.
Restricted Stock
Plan for
Directors and
are not eligible
to receive
nonmanagement
director stock
options under
the Fannie Mae
Stock
Compensation
Plan of 1993.
Board composition/qualifications
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Number of board 11 18 18 3 13 5 9 9 11 Up to 9
members Directors.
(9 Governors (6 current (9 Directors
plus the PMG and members and 3 plus the
DPMG) vacancies). Chair and
President).
How board 9 Governors 13 members 5 appointed by Appointed by the 7 appointed 3 appointed 3 members are Appointed by 9 Directors Directors are
members are appointed by the elected by the President of President of the by the by the appointed by the President are appointed appointed by
selected President of the shareholders. the United United States President of President of President of of the United by the the Governor-
United States, States. with the advice the United the United the United States with Minister with General on
by and with the 5 members and consent of States (5 of States, by States and the advice the approval the
consent of the appointed by 13 elected by the Senate. whom shall be and with the confirmed by and consent of the nomination of
Senate. President of the voting common officers or advice and the Senate of Senate. Governor in the Minister
United States. stockholders. employees of consent of (representing Council. for
Governors the the Senate. labor, state The Governor Communication
appoint PMG. Department of governors, in Council s and the
Agriculture 1 member and appoints the Arts.
Governors and and not shall be the business). Chair and
PMG appoint officers or Comptroller President/ The Managing
DPMG. employees of of the 2 members CEO . Director is
the Rural Currency. represent appointed by
Utilities commuter the Board of
Services, and 1 shall be authorities Directors.
2 of whom the Director and are
shall be from of the Office selected by The Minister
the general of Thrift the President must consult
public and Supervision. from lists with the
not officers drawn up by Chair of Post
or employees those prior to
of the authorities. appointing
federal Directors,
government). 2 are and one
selected by Director must
3 elected by the be recognized
stockholders Corporation's as having an
of eligible preferred appropriate
cooperative stockholder- understanding
borrowers. -the of the
Department of interests of
3 elected by Transportatio employees.
stockholders n.
of eligible
commercial The Secretary
borrowers. of
Transportatio
n and Amtrak
President
serve by
virtue of
their
offices.
Number of years 9 years for the 1 year 1 year 9 year fixed At pleasure 6 years for 3 members The term of Not to exceed Up to 5 years
members are to 9 Governors. A terms are of the each appointed by office of 3 years for for Directors
serve Governor may staggered so President of appointed the President each member Directors. as specified
continue to that one begins the United member, but of the United of the board in the
serve up to 1 every 3 years on States for they may States and appointed by As determined instrument of
year after term May 18 (e.g., appointed continue to confirmed by the President by Governor appointment.
expires while 1990, 1993, and members. serve after the Senate of the United in Council
awaiting a 1996). the (representing States shall for Chair and
successor to be 2-year terms expiration of labor, state be: President/
named. for elected their terms governors, CEO.
members. of office and business) 6 years,
PMG serves at until a serve for 4 except as
pleasure of successor has years. provided in
Governors. been section 5(c)
appointed and 2 members of the Public
DPMG serves at qualified. representing Telecommunica
pleasure of commuter tions Act of
Governors and Others serve authorities 1992.
PMG. during their serve for 2
terms as years. Any member
Comptroller whose term
of Currency 2 members has expired
and Director selected by may serve
of the Office the until such
of Thrift Corporation's member's
Supervision. preferred successor has
stockholder, taken office,
the or until the
Department of end of the
Transportatio calendar year
n, serve for in which such
1 year. member's term
has expired,
2 ex officio whichever is
members (the earlier.
Secretary of
Transportatio Any member
n and the appointed to
President of fill a
AMTRAK) serve vacancy
as members as occurring
long as they prior to the
remain in expiration of
their the term for
positions as which such
Secretary of member's
Transportatio predecessor
n and was appointed
President of shall be
AMTRAK. appointed for
the remainder
of such term.
Board member Qualifications Of 5 At least: Each member must 5 members Appointed Directors No more than None The board
qualifications are not presidentially be a U.S. appointed by board members must be U.S. 6 of the specified. must have a
and prescribed in appointed 1 from home- citizen and the President must be U.S. citizens. appointed mix of skills
restrictions as legislation. members, at building profess a belief of the United citizens, and members may appropriate
stated in least: industry; in the States must not more than Secretary of be from the for the
legislation No restrictions feasibility and be officers 3 of the Transportatio same Corporation.
in legislation 1 must be from 1 from mortgage wisdom of the or employees members may n serves as political One member is
regarding who mortgage lending lending TVA Act of 1933. of the be members of Board member party. to have an
can be PMG and industry; industry; Department of the same by virtue of appropriate
DPMG. Members are Agriculture political his office. The 9 understanding
1 from 1 from real prohibited from and not party. appointed of the
No political homebuilding estate industry; having a officers or Amtrak's members shall interests of
recommendations industry; and financial employees of President be selected employees.
may be interest in any the Rural serves as the from such
considered when 1 from real 1 from an public utility Utilities Chairman of fields as
selecting PMG estate industry; organization corporation Services. the board by education,
and DPMG. and that has engaged in the virtue of his cultural and
represented business of 2 members office. civic
Governors are 1 from an consumer distributing and appointed by affairs, or
chosen to organization interests for selling power to the President 3 members are the arts--
represent the that represents not less than 2 the public or in of the United appointed by including
public interest consumer years, or 1 any corporation States must the President radio and
generally and interests for person who has engaged in the be from the of the United television--
cannot be not less than 2 demonstrated a manufacture, general States and and represent
representatives years, or 1 career selling, or public and confirmed by various
of specific person who has commitment to distribution of not officers the Senate regions of
interests using demonstrated a the provision of fixed nitrogen or employees (representing the nation,
the USPS. career housing for low- or fertilizer, of the labor, state professions,
commitment to income or any federal governors, and
Not more than 5 the provision of households. ingredients government. and occupations,
of the Governors housing for low- thereof; nor business). and represent
can be members income shall any member 3 members various kinds
of the same households. have any must be 2 members of talent and
political interest in any elected from represent experience
party. business that cooperative- commuter appropriate
may be adversely type authorities to the
No officer or affected by the organizations and are function and
employee of the success of the . selected by responsibilit
United States corporation as the President ies of CPB.
may serve producer of 3 members of the United
concurrently as concentrated must be States from Of these
a Governor. fertilizers or elected from lists drawn appointed
as a producer of commercial- up by those members, 1
A Governor may electric power. type authorities. shall be
hold any other organizations selected from
office or Also, board . 2 members are among
employment not members are selected by individuals
inconsistent or prohibited, the who represent
in conflict with during their Elected board Corporation's the licensees
his duties, tenure in members must preferred and
responsibilities office, from be officials stockholder. permittees of
, and powers as engaging in any (managers, public
an officer of other business. directors, television
the USPS. etc.) of the stations, and
organization 1 shall
they represent the
represent. licensees and
permittees of
public radio
stations.
Are there Nothing A director No, but None. No. There are no None. Yes. No No. Law None
restrictions on specified in should not be stockholder- restrictions member of the states that a specified in
the number of statute or renominated elected contained in board shall Director may, enabling
terms a member regulation. after having directors must the statute. be eligible on the legislation.
can serve? served for 10 retire at age to serve in expiration of Directors
years or longer, 72. excess of 2 his/her term have been
although consecutive of office, be reappointed.
nominating full terms. reappointed
committee may to the board.
for good reason
propose the
renomination of
such a director.
No director
should be
proposed for
renomination
after 15 years
of Board
service.
Is board Board of Board of Board of Board of Board of Board of Board of Board of Board of Board of
referred to as Governors. Directors. Directors. Directors. Directors. Directors. Directors. Directors. Directors. Directors.
"Board of
Directors,"
"Board of
Governors" or
by another
title?
How is Chair Elected by the Elected by By annual vote Designated by Elected by One of the President Members of The chair is Chair is
selected? Governors from Board. of the Board of the President of Board appointed serves as the board appointed by selected by
among the Directors. the United members. members shall Chair. annually the Governor the Minister,
members of the States. be designated elect one of in Council. with
Board. by the their members appointment
President of to be Chair made by
the United and elect one Governor
States, by or more of General.
and with the their members
advice and as a Vice
consent of Chair or Vice
the Senate, Chairs.
to serve as
Chair of the
Board of
Directors for
a term of 5
years.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Data displayed in this appendix were obtained primarily from
the matrices completed by the boards of organizations included in our
study. After receiving the completed matrices, we contacted each
organization for clarification of some of their responses. We did
not independently verify the information provided.
\a Until privatization (privatization will occur when 51 percent of
the class A stock issued to the United States and outstanding at any
time after September 30, 1995, has been fully redeemed and retired).
\b The Australian Postal Corporation came into existence on January
1, 1989. It succeeded the Australian Postal Commission. The legal
status and identity of the Corporation did not change its present
form until the Australian Postal Corporation Act came into effect on
July 1, 1989.
\c Section 212 of the Federal Power Act, 18 U.S.C., authorizes the
Federal Energy Regulatory Commission to review and approve rates for
the transmission of electric power in connection with transmission
services rendered pursuant to a Federal Energy Regulatory Commission
order under section 211 of the Federal Power Act.
\d Some organizations provided data on pay and benefits, and others
provided information only on pay.
\e The PMG, in commenting on a draft of this report, provided
additional information on CEO pay at nine foreign postal
administrations, including Canada Post and Australia Post. See
appendix V for additional information. We did not independently
verify the information provided.
\f This plan also permits Directors to receive shares of the
corporation's common stock in lieu of any portion of cash
compensation.
Sources: Boards of the respective organizations.
(See figure in printed edition.)Appendix V
COMMENTS FROM THE U.S. POSTAL
SERVICE
========================================================== Appendix IV
(See figure in printed edition.)
(See figure in printed edition.)Appendix VI
COMMENTS FROM THE U.S. POSTAL
SERVICE BOARD OF GOVERNORS
========================================================== Appendix IV
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix VII
GENERAL GOVERNMENT DIVISION
Michael E. Motley, Associate Director
Teresa L. Anderson, Assistant Director
Arnel P. Cortez, Evaluator
Martin de Alteriis, Senior Social Science Analyst
Roger L. Lively, Senior Evaluator
Charles F. Wicker, Senior Evaluator
OFFICE OF GENERAL COUNSEL
Jill P. Sayre, Senior Attorney
*** End of document. ***