WASHINGTON — Second-guessing Amtrak management’s compensation and lack of investment outside the Northeast Corridor became a spectator sport for Congress in 2023. But lawmakers’ inaction in advancing new Amtrak board of directors nominees has contributed to the status quo over which they and their constituents express concern.
Lack of capacity to accommodate surging post-COVID-19 ridership demand is a hot topic itself, but it was just one of many issues that put Amtrak’s top guns on the defensive.
Management bonuses
The perception that company leaders had figured out a way to generously pay themselves incentive bonuses while running a “money-losing” company was explored by a U.S. House rail subcommittee grilling Amtrak CEO Stephen Gardner in June.
In a letter to House Transportation and Infrastructure Committee Republican leadership in late 2022, board Chairman Anthony Coscia explained, “Incentive payments to management is entirely contingent upon the success of the company in meeting challenging performance goals approved by Amtrak’s Board of Directors and informed by external compensation consultants. … Simply put, if Amtrak does not meet these challenging expectations, then our executives are not rewarded.”
The factors involved in those “challenging performance goals” remain hidden behind an Amtrak barrier protecting what it calls “commercially-sensitive information.” That left plenty of room for Republican lawmakers, in charge thanks to a slight House majority, to attack the CEO’s nearly $500,000 annual compensation and $766,000 bonus haul over a five-year period.
Gardner implied the ball for sustaining national-network operations is solely in Congress’ court when he quoted Northeast Corridor “per rider” costs of $11 per passenger, compared with $148 for long-distance trains. State-supported and long-haul trains are saddled with a heavy dose of allocated costs — formulas for which also not been disclosed — while Northeast Corridor trains are charged only a fraction of the substantial expense of running and maintaining the extensive Amtrak-owned physical plant.
No new board of directors
This kind of portrayal, coupled with the perceived acquiescence by the current Amtrak board when management attempted to truncate the Southwest Chief in 2018, prompted senators’ renewed attempt to reconstitute the board in a form that would adjust company priorities.
Terms of every existing board member, including chairman Coscia, expired during the Trump Administration or earlier. But by statute, those individuals continue to serve until President Joe Biden advances a bipartisan slate of new nominees that must be confirmed by the U.S. Senate.
Amtrak provisions of the Bipartisan Infrastructure Law stipulate that at least two of the eight members must represent and reside in states served by each of the three Amtrak service units: Northeast Corridor, State-supported routes, and long-distance trains.
Despite the clear directive, five of the six Biden administration’s nominees advanced in 2022 hailed from Northeast Corridor states. Prior to that, no action was taken, nor did Congress prod the president to do so for nearly two years. So, in April, a number of senators announced their intention to block the entire slate until the president geographically rebalanced it.
Over the next few months, however, no candidates were withdrawn and only one new name was advanced: Republican Joel Szabat from Maryland, another Northeast Corridor candidate. The blame for a lack of action must also fall with Senate Majority Leader Chuck Schumer (D-N.Y.), who clearly was responsible for boosting his region by ignoring the law, and Minority Leader Mitch McConnell (R-Ky.), who made no effort to suggest GOP nominees outside the Northeast.
The administration tried again to get some new board members confirmed in October by advancing three names: Szabat; Normal, Ill., Mayor Chris Koos (his third nomination since 2020); and Coscia. That wasn’t good enough for Sens. Jerry Moran (R-Kan.) or Jon Tester (D-Mont.), who placed holds on those nominees.
Tester, who is up for reelection, later said he would lift his hold once the administration dropped one Northeast Corridor nominee and added someone from the west, but those events have yet to occur. Both parties have had ample opportunity to begin vetting potential candidates, but no publicly disclosed action has been taken amid political turmoil on Capitol Hill.
The prevailing attitude among lawmakers in Congress may be that Amtrak management just wants to get paid, but as the calendar flips once again, lawmakers have failed to make any meaningful effort to alter the status quo.
Previous News Wire coverage:
“Senators challenge Northeast tilt of Amtrak Board Nominees: Analysis,” April 26, 2023.
“Gardner’s bonuses, profitability challenged at House hearing: Analysis,” June 6, 2023.
“Senators remain concerned about geographic balance of Amtrak board,” June 21, 2023.
“Three nominees for Amtrak board advance to full Senate,” Oct. 19, 2023.
“Kansas Senator places hold on Amtrak Board nominees: Analysis,” Oct. 27, 2023.
As much as I love traveling by train, until the government guarantees funding Amtrak will just be what it is. An after thought for most travelers. My last trip from Florida in Sleeping car was fantastic, great food, service and employees. That is not a guaranteed experience though. Travel to Florida was horrible with the box meals and no real dining car service during covid. If the government can’t fix what Amtrak has become, they should just kill it off once and for all. The alternative would be to come up with secure funding, as is done in the rest of the world. Politicians will never let this happen.
Just go to Beach Grove or Hialeah and see all the current coaches sitting around not being used because Amtrak can’t afford to fix them. How about Congress give them a ONE TIME Appropriation designated for repair of these cars ONLY and then Amtrak wouldn’t need any fancy new ones that won’t get built for 20 years anyway… and would be put in a contract with no limits or financial responsibility of the builder. Doing the same thing and expecting different results equals FAILURE.
Well, the LD on board employees who are doing all the work and getting no bonus compensation are not real happy. Therefore while Amtrak promises a customer focus travel experience, this may not be possible with agitated employees. Unfortunately NARP has not been able to sway Congress or Amtrak management to do ANYTHING different, so I will be withholding any further contributions until I see Amtrak do something differently.
“Despite the clear directive, five of the six Biden administration’s nominees advanced in 2022 hailed from Northeast Corridor states.” And nothing has been done to call those responsible for that slate have been called to account. Absolutely disgraceful.
It is sad is that others have been noting the screwed up operation of LD trains. The over allocation of costs onto LD and some regional trains has also been noted by others. What is puzzling is that congress has fiddled while Amtrak burns down.
Lack of competency best describes management; running Superliners on state supported trains; doing all they can to cut costs and downgrade service on routes like the Capitol Limited and Texas Eagle, no lounge car, no full service dining, no offering of dining to coach passengers so they can give themselves bonuses!! Representation outside the Northeast Corridor is essential!