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July 6 2009 10:36 AM

I'm retired now three years, and as and old industry curmudgeon, I have the luxury of being able to say what's on my mind and not have to worry if it's politically correct.

I was at a fairly large gathering of shippers and carriers recently, and someone went off on a rant about how much money the Postmaster General of the United States, Jack Potter, made last year in total compensation. It's reported that he earned $850,000 in total compensation. Granted, that's a lot of money; however, I felt there was tremendous venom coming from those in our party that the Postmaster should not be making that kind of money. The whole conversation made me very angry because it's my feeling that the Postmaster General is not being compensated fairly versus his peers for the amount of responsibility on his shoulders. And having been in management, where a fairly large chunk of my income was predicated on attaining performance milestones and knowing that a sizeable portion of the Postmaster's compensation was performance based, how dare one deny Mr. Potter his bonus when he achieved what the Board of Governors asked him to accomplish (and then some in several key areas).

I looked up what Scott Davis, the Chairman of UPS, made for 2008 in total compensation. It was just over $5.6 million dollars. UPS has far less revenue and far fewer employees to manage than the Postmaster General. FedEx is significantly smaller than UPS in revenue and employees, but Fred Smith, FedEx's chairman made over $10.9 million dollars. UPS has revenue of $51 billion and 425,000 employees. FedEx has revenue of $38 billion and 290,000 employees and contractors.

Frank Appel, the Chairman of Deutsche Post, the German Post office, made over $2 million USD last year in cash compensation not including his stock grants. Peter Bakker of TNT Express made over $2.1 million U.S. dollars in 2008 not counting his deferred compensation.

Jack Potter managed almost $75 billion in revenue and over 660,000 employees. TNT had revenues of less than $17 Billion USD. Yet Peter Bakker made more than twice what our postmaster did.

There is not anyone in the USA more qualified to do the job that Mr. Potter is doing than he is. The Postmaster worked his way up through the ranks of the USPS and knows how to navigate through the complexities of the bargaining units and the constraints imposed upon the Postal Service by our elected officials. It is not an enviable post.

I watched Mr. Potter manage the crisis after 911 with Anthrax being let loose within the postal stream and how a plan was launched after Katrina to quickly restore delivery to those in the affected areas even with washed out roads and destroyed post office facilities and vehicles.
Now with the extraordinary drop in the numbers of transactions moving through the USPS because of the economy, this coming year poses a Herculean task for the Postmaster as he tries to rapidly reduce operating costs to offset the dramatic deterioration in postal revenues. The Postal Service has the political realities to deal with that limits lay offs and closure of postal facilities to trim costs. No doubt the Postmaster will be criticized by members of Congress and the unions and mailing groups with some vested interest they are trying to protect. But the one thing we should not do is bemoan the compensation he receives for managing one of the most complex businesses in the world. Frankly I don't think Mr. Potter is paid enough.

Jerry Hempstead is president of Hempstead Consulting. He is a frequent speaker and lecturer on transportation and logistics and has written scores of articles on the subject. He is the past recipient of the Transportation of the Year award from Delta Nu Alpha, the Franklin Award from the Mail Systems Management Association and the lifetime award of a Distinguished Logistics Professional (DLP) from the American Society of Transportation and Logistics. He can be reached at or