GLOVERSVILLE - Local officials Wednesday reacted with shock to news that administrators of Fulton County's two top economic development agencies were paid more than $400,000 in bonuses for 2008.
The bonuses came on top of their regular five- and six-figure salaries, and they were granted in a county whose median annual household income is $45,360.
"I think it's extremely excessive for this area," Linda Kemper, chairwoman of the Fulton County Board of Supervisors' Economic Development Committee, said today. "I think it's absurd, to tell you the truth."
U.S. Internal Revenue Service 990 forms, available online, indicate that Jeff Bray, the Fulton County Economic Development Corp.'s senior vice president, was paid a 2008 bonus of $418,727.
Documents indicate that Peter A. Sciocchetti, executive vice president of the Crossroads Incubator Corp. - the EDC's real estate subsidiary - was paid a $477,962 bonus in 2008.
Figures for 2009 were unavailable.
The CIC granted the bonuses, although current CIC volunteer Board of Directors President Joyce Royal said today she was unaware of who actually approved granting them.
"I've only been president a year," Royal said. "I didn't know about them when they were given."
She said Donald F. Stanyon Jr. was CIC board president in 2007 and 2008. He didn't return phone calls Wednesday and today seeking comment.
Royal said Bray, who came to his EDC position in 1991, and Sciocchetti, who a few years later headed up the then-newly formed CIC, work on a contractual basis. She said Sciocchetti did have a 10-year deal, but that expired, and he now works on a monthly contract.
The EDC and CIC market the county for potential economic development opportunities. Past large signings of companies over the years have included Spalding and Walmart facilities and the Fage USA yogurt plant, which was first announced by the EDC five years ago.
Royal said Bray set up a system years ago in which EDC and CIC employees can earn bonuses based on their "production."
Figures were not available for 2009, but documents show Bray drew a $170,483 executive salary in 2008 from the EDC and a separate $2,242 salary from the CIC. Sciocchetti was paid about $70,000 by the CIC in 2008.
In 2007, documents show Bray received $484,282 for a benefit plan. That year, Sciocchetti received $494,438 for an employee benefit plan.
Area politicians and development officials had varying reactions to the bonuses.
Fulton County Industrial Development Agency board Chairman Joseph Gillis said Wednesday he was taken aback by the amounts.
"It's jaw-dropping," Gillis said. "I personally had no idea of that amount of compensation."
Current EDC Board of Directors President Laurence Kelly said Wednesday he doesn't "really know enough" about the CIC bonuses to comment.
"If it were for 18 years of service, then they're probably appropriate," Kelly said.
Brian Hanaburgh, who served as EDC board president in 2008 and 2009, said Wednesday he was unaware of the executive bonuses.
"It's [bonuses] all done by the [economic development] board members," Gloversville Mayor Dayton King said Wednesday. "I'm glad someone is making money in this area. I wish we could create more jobs with this money."
King, who earns about $39,000 annually, described the $400,000 bonuses received by Bray and Sciocchetti as a "ton of money."
He said he hopes the "public is aware" it would take the "CEO of a city" at least 10 years to earn one of their bonuses.
King said today Gloversville used to make an annual contribution to the EDC, but doesn't anymore. He said he wants to know who approved the bonuses - the EDC or CIC.
"Either way, it's a black eye," the mayor said.
A change was made late last year in top administrative positions at the Fulton County EDC, partly designed to free up more time for former Executive Vice President Bray, a Guilderland resident, to scour the Capital Region for more local business prospects. Michael Reese is now the agency's new executive vice president and chief executive officer, although Bray remains on the payroll.
On Dec. 31, the agency announced Reese was to be the EDC's top administrator.
King noted the CIC "sold off a ton of property" in recent years.
He was referring to the sale of many of its properties to Boston-based property management company Stag Capital Partners. The CIC sold 12 of the agency's 22 Fulton County buildings and properties - industrial and business park buildings - for $31.2 million.
Neither Reese, Bray nor Sciocchetti returned phone calls seeking comment Wednesday or this morning. But the EDC Wednesday issued a news release stating the bonuses were given because of CIC's deal with Stag.
"In accordance with the employment contracts, incentive-based compensation was awarded," the release said.
EDC officials added, "In 1991, the EDC was struggling, along with its sister corporation Crossroads Incubator Corp. Together, the organizations were $41,000 in the red. We recognized the need to construct new, state-of-the-art facilities to attract the in-migration of new companies, and the expansion of existing businesses, which would bring job opportunities to our citizens. Crossroads Incubator Corporation, as a real estate holding and management company, was the entity to develop those facilities.
"In 1992, due to a weak balance sheet, and in order to attract and retain qualified and experienced people, we formulated an incentive-based compensation program which rewarded success," the release stated. "Through the 1990s, that team negotiated, structured financing, constructed, and managed over 1.2 million square feet of new facilities, valued at over $50 million on behalf of CIC in Fulton County. Through this period, the incentive compensation was accrued, so that excess dollars could be invested into new projects, as equity, to deliver competitive rental rates. As CIC matured, the contracted, accrued compensation began to be allocated to the employees."
"I was kind of shocked when I first heard it," Fulton County Board of Supervisors Chairman Greg Fagan said Wednesday of the bonuses.
Fulton County taxpayers annually contribute $75,000 to the EDC.
"How do you quantify that?" Fagan asked of the CIC's bonuses. "You don't know what it was for. Is it a performance thing? I don't know."
But Fagan noted the EDC has in the past and currently created many jobs for Fulton County the past two decades.
"I think we all should value what these people have done for the area," the county board chairman said.
Johnstown Mayor Sarah Slingerland said Wednesday her city contributes $15,000 to the EDC, largely for the Johnstown Industrial Park.
She said she's not sure of the "criteria" by which the CIC gave hefty bonuses to Bray and Sciocchetti, but her city had nothing to do with it.
"The city of Johnstown has never had any input into their professional business model," Slingerland said.