A Golden Handshake? : Huge deficit must be noted in plans for Hickey’s severance pay
Like many executives who have changed jobs frequently as they have moved up the career ladder, San Diego County Chief Administrative Officer Norman Hickey faces the end of his career with a pension shortfall. Hickey, 64, wants to step down in January, 1993, after seven years of county service. But he won’t be eligible for a county pension until 1996.
So the Board of Supervisors is trying to put together a retirement package for Hickey. In relatively healthy economic times, sweetening the compensation package of a highly regarded executive might be business as usual. But in this crippling economy, an extra $100,000 or more in severance pay and deferred compensation is much harder to justify.
The county cannot even afford the guards to finish opening its newly built East Mesa jail. It has had to close the Vista Health Center and impose a hiring freeze. Welfare payments have been reduced. And the worst may be yet to come. Because of the recession, officials say that revenue may fall $32 million short of what they have budgeted for.
There’s been talk of closing libraries. The county mental hospital could be in jeopardy again. County employees may face layoffs or furloughs to make ends meet. It’s hardly the climate for golden, or even silver or bronze, handshakes.
Hickey knew about the retirement requirements when he was considering making the move from Florida to San Diego and says he negotiated for severance pay and other benefits at the time. Now it’s just a matter of formalizing the agreement.
One of the proposals being discussed is to keep Hickey on staff at $26 a year until he reaches 10 years of service to make him eligible for a pension of about $18,000 a year. This is irregular but could be a good deal for the county. The county could use his talents--if the new CAO will accept help from a predecessor--and it could be cheaper than hiring consultants.
Also being discussed is six months severance pay, something normally reserved for people who are terminated or laid off. That would amount to $67,000 based on Hickey’s current salary of $134,000, and would require a change of law. Under last month’s proposal, the county would also increase Hickey’s deferred compensation--money he would not get until retirement--from $41,673 a year to $75,010.
If the supervisors promised Hickey severance pay and other retirement sweeteners six years ago to get him to take the job, they must honor their commitment.
But today, given the bitter pills that county residents--and perhaps employees--are being asked to swallow, $100,000 or more in special compensation for a $134,000-a-year employee looks like extra icing on an already sweet cake.