MTA releases previously secret CEO compensation

PALMER — The Matanuska Telephone Association Board of Directors revealed Thursday the current annual salary and bonus of the cooperative’s Chief Executive Officer after months of refusing to provide the figures to the general public upon the request of a former board member and the Frontiersman.

In a June 2 press release sent to the Frontiersman after MTA CEO Greg Berberich was asked by the Frontiersman this week about a ballot proposal requiring the board secretary to announce the total cost of the CEO at its Annual Meeting and to publish those costs in MTA’s annual report to members, the board issued a statement “to dispel any notion that MTA is trying to hide the compensation it pays CEO Greg Berberich, and to avoid any unnecessary distraction regarding this matter at our 2011 Annual Meeting.”

The statement begins with Berberich’s 35-year history with MTA and how much the organization has benefitted from his “strong and highly regarded” leadership.

“We are very fortunate to have his experience, talent and dedication leading our organization,” the statement says. “In Alaska and across the country, Mr. Berberich is well known and highly regarded throughout the telecommunications community.”

It goes on to list his awards and accomplishments within the state and nationally on behalf of rural telecommunications before getting into his CEO contract and pay.

“Mr. Berberich is in the third year of a six-year employment contract. At his request, his compensation was frozen for a number of years,” it states. “This year in evaluating his salary, the Board commissioned an independent CEO compensation study completed by Milliman Inc. The report indicated that both base and total compensation paid MTA’s CEO were well below market rates.”

At the board’s April meeting, the board voted to increase Berberich’s base salary by 5.5 percent for an annual salary of $250,000 and also rewarded him with a $110,000 performance bonus, the press release states.

“Even with this adjustment, Mr. Berberich’s total compensation remains substantially below that of most CEOs included in the survey,” it states.

Other annual compensation includes the standard benefits package provided to all full time employees, use of a company car, key main life insurance, and telecommunications products “which are typical components of a CEO compensation package.”

Berberich’s salary and bonus became a public issue in January after the Frontiersman learned Berberich rewarded all 350 MTA employees with $1,000 holiday bonuses and former Board Director Chuck Foster began protesting the expenditure and demanding members be informed about Berberich’s compensation.

“Members deserve to know how their money is spent,” Foster had said.

Berberich and the board had argued the CEO’s salary should not be made public because MTA is in a highly competitive business market and releasing such information could affect MTA’s ability to remain competitive. It also was not previously released because it was determined in executive session and executive session matters usually remain confidential, the board has stated.

“MTA’s policy for over 20 years has been that employee salary information is private and confidential, including the CEO’s,” Berberich said in an email to the Frontiersman Thursday. “This policy was in place prior to Director Foster’s resignation in January and was developed when he was on the board back in the late ’80s.”

Foster’s fight against the policy culminated in him gathering 92 signatures from members on a petition to get a proposal on this year’s annual election ballot requiring the CEO’s total cost to be released to all members on an annual basis.

He only needed 50 signatures to get it on the ballot, but it did not receive an endorsement from the board.

“The Board of Directors unanimously recommends a NO VOTE on this proposal,” the proposal urges.

The ballot proposal, which is being voted on with two other proposals and the filling of two open board seats at MTA’s Annual Membership Meeting June 15 at the Alaska State Fairgrounds, begins with an explanation of the current bylaw which allows members to request in writing such information for a “proper purpose.”

Foster’s bylaw amendment would override that policy.

Berberich explained Thursday that “proper purpose” means one that bears a close relationship with the member’s interest as a member of the cooperative.

When asked if it would be a “proper purpose” if the Frontiersman, as an MTA member, requested in writing the CEO’s compensation and bonus information for the purpose of public disclosure, Berberich said it would not.

“The purpose of ‘public disclosure’ is not a proper purpose,” Berberich said. “It bears no relationship to the Frontiersman’s status as a customer/member of the cooperative. The importance of a proper purpose is applicable to any records belonging to the cooperative, not just CEO compensation information; a member seeking information for public disclosure or wanting a copy of a confidential litigation settlement agreement, for example, would also be told a request for ‘public disclosure’ does not state a proper purpose. The Frontiersman’s readership goes beyond just MTA’s member/owners.”

As for board elections, newcomer Paul Farnsworth, of Palmer, is taking on incumbents Catherine Fosselman and Al Strawn.

A packet with their information and the ballot proposals was mailed to MTA members in mid-May.

Foster said this week he’s planning to vote for Farnsworth and all three ballot proposals. He said that although he didn’t know anything about Farnsworth, he figures new blood couldn’t hurt.

Foster said the first two ballot proposals on providing additional time to determine board candidates and prepare ballots and requiring capital credits for all MTA family services are good housekeeping measures.

Farnsworth, an Alaska Railroad Corp. facilities director who’s been an MTA customer for 30 years and a Palmer resident for eight years, said he’s been thinking of running for a local utility board for a while.

“I looked at MEA and MTA and figured MTA was a better opportunity because I think the governance over there is good and their management is focused on the needs of the members,” Farnsworth said. “This is not a ‘throw the bums out’ move on my part. I just want to give it another sense of direction.”

Farnsworth, who drives a natural gas-powered Honda Civic that can travel 100 miles for what most drivers pay for a gallon of gas, said he’s been able to help cut the railroad’s fuel bill for the freight yard in half.

“I call myself ‘the king of green’ that is the same shade as a $20 bill,” he explained. “I just want to help us be good stewards of the environment and our natural resources.”

Farnsworth said he plans to vote against Foster’s ballot proposal.

“I think it’s the board’s job to ensure the company meets industry standards for CEO compensation,” he said. “If there’s a reason for people to know that, that’s fine. But I think it takes the focus away from the business at hand.”

Contact K.T. McKee at kate.mckee@frontiersman.com or 352-2252.