Amtrak Pays Executives Hefty Bonuses as Losses Continue

Fourteen Amtrak executives received more than $200,000 in incentive bonuses last year despite the service’s poor recent financial performance and struggles with its capital improvement projects, according to documents obtained by The New York Times.

In 2023, Amtrak paid out more than $5 million in short- and long-term incentive bonuses to its executives even as the passenger rail service posted $1.7 billion in losses, according to records obtained from Senator Ted Cruz’s office. Particularly problematic for Amtrak has been its effort to upgrade its service on the Acela, a popular high-speed express route between Boston and Washington, D.C.

“From delays for the new Acelas to annual shortfalls in the billions of dollars, Amtrak’s performance has been seriously deficient,” Mr. Cruz said. “It’s inexplicable that a dozen-plus Amtrak executives collected six-figure bonuses on the taxpayer’s dime.”

Amtrak says the executive bonuses are necessary to attract and retain talent and rail expertise.

Its incentive bonus program for 2021 came under intense scrutiny after The Times reported the company had paid about $2.3 million in bonuses when the rail service reported its lowest revenue and biggest losses in more than a decade. On Wednesday, the House Transportation and Infrastructure Committee held a hearing to discuss two bills to increase transparency and accountability around the Amtrak bonus payouts.

Amtrak paid no bonuses in 2020 amid pandemic disruptions to the country’s passenger rail service and much of the travel industry. Since then, Amtrak has paid about $12 million in incentive bonuses.

Amtrak’s chief executive, Stephen Gardner, was among three executives who did not receive a long-term incentive bonus last year but did receive the largest short-term incentive bonus payout at about $320,000. Mr. Gardner testified in 2023 before a House panel that his annual salary was a little under $500,000 a year.

Roger Harris, Amtrak’s president, received the highest long-term goal payout at about $305,000. In addition, Mr. Harris also received another roughly $232,000 from a short-term bonus paid out to put his total incentive bonus compensation over half a million dollars for 2023.

Eleanor Acheson, the service’s general counsel and corporate secretary, and Tracie Winbigler, the chief financial officer, also received about a half-million dollars in incentive bonuses last year.

Amtrak has defended its payouts in recent years, saying that the bonuses help make their jobs more competitive and desirable. The chief executives of freight railroads, which are profitable, received millions in bonus and incentive payments last year, for example.

“For Amtrak to be successful, we need to attract highly skilled employees all over the U.S. and compete with the private-sectors freight railroads, consulting firms, airlines and others that seek the short supply of qualified staff in the U.S.,” Christina Leeds, a spokeswoman for Amtrak, said in a statement this week.

The passenger rail service lowered its reported losses from about $2 billion in 2021 to about $1.7 billion in 2023. The rail service continues to miss out on potential revenue in part because of struggles to phase out the older Acela trains on its Northeast Corridor and get its replacement up and running. The new Acela trains are expected to travel at higher speeds and increase the number of customers Amtrak can carry from Washington to Boston, but the project is three years behind schedule.

Amtrak said the executive bonuses were based on ridership, customer satisfaction and financial performance. A letter sent from Mr. Cruz, a Texas Republican, and Senator Deb Fischer, a Nebraska Republican, to Amtrak on Tuesday argued that bonuses were not justified given the service’s failure to meet its customer satisfaction goals and its billions in losses.

“C-suite executives of any other corporation that suffered over $1 billion in annual losses would be fired,” the letter reads. “Amtrak, however, is rewarding them. These bonuses are particularly galling because they come at taxpayers’ expense without Amtrak having achieved even satisfactory performance.”

As the rail service continues to press forward on improvement projects, including the new Acela trains and replacing outdated regional trains, officials there find themselves trying to build out their work force and expertise after years of setbacks.

In 2021, the Biden administration made its largest investment in passenger rail since Amtrak started operating in 1971 as part of the $1 trillion infrastructure bill. Congress set aside $66 billion for the rail sector, a third of it specifically for Amtrak.

Amtrak has lost money every year since it started operating. The rail service nearly turned a profit in 2019, but the pandemic slammed the door on that opportunity, and the company has been making up ground since.

It said it created the bonus incentive program in 2013 after making changes to its pension program and closing it off for new employees, which has saved the rail service hundreds of millions of dollars, Ms. Leeds said.

“We used to offer defined pensions and retiree benefits to attract employees that were paid regardless of performance,” she said. “We moved, at the recommendation of Congress, to performance-driven incentives — incentives are cheaper for the taxpayer and drive business results.”

In the fiscal year of 2023, Amtrak met two of its three goals set for the short-term bonus program by reducing the number of delays and by reducing the operating loss by $90 million more than its targeted goal. Customer satisfaction continues to be a challenge for the service, as it just barely missed hitting the milestone it had set. No bonuses tied to customer satisfaction were given, Ms. Leeds said.

As for the service’s long-term goals, which were set back in 2021, Amtrak met four of five, but the service again underperformed on customer satisfaction.

In the 2023 fiscal year, ending in September, Amtrak customers took nearly 29 million trips with the company, about a 25 percent increase from the year before. By comparison, Amtrak reported only about 12 million customer trips in 2021.

Increased ridership and ticket sales led to a $3.4 million increase in operating revenue, which was 20 percent higher than the year before but still was not enough to help the company turn a profit.