Tennessee State Senator Steve Cohen is criticizing the states lottery board saying an $85,000 independent study to develop a permanent employee pay plan is unnecessary and that more bonuses should not be awarded those who work for the corporation.
Cohen (D-Memphis), who pushed for the states upstart lottery in the General Assembly for roughly two decades, says Tennessee Education Lottery Corporation (TEL) head Rebecca Paul brings with her a record of awarding lavish benefits in her former job at the highly successful Georgia Lottery.
Georgias [employee benefit] policies were fiscally irresponsible, said Cohen. Setting incentives is what the board ought to be doing. Its their job to make value judgments.
The TEL board recently approved an $85,000 contract with consulting firm Deloitte and Touche of Nashville to recommend permanent benefit, incentive, compensation, attendance and leave plans. The firm would also recommend employee, performance and classification standards.
Roughly 28 lottery college scholarships could be funded out of $85,000.
Recommendations are expected some time this month.
Cohen says practices during Pauls stint in Georgia shouldnt be continued in Tennessee.
According to the Atlanta Journal Constitution Paul and three of her top executives, who now are on board at the TEL, received $300,000 in unpaid leave upon their Georgia departure. Additionally, 13 top executives were paid $587,000 in 2003 bonuses, according to the newspaper.
TEL spokesperson Kym Gerlock says the TEL board itself decided to hire Deloitte and that the Memphis senator, only months after passage of the states lottery legislation, had no complaints when Paul arrived from Georgia.
Ive got a direct quote that appears to be 100 percent supportive, said Gerlock quoting a September newspaper account. Its interesting hes changed his mind.
Shes worth every penny shes paid, said Cohen in the article.
Paul has maintained all along that every TEL employee from top to bottom should receive incentives.
Employees of the TEL who helped in the initial startup received bonuses. However, those phases are over and a permanent incentive plan should be established, said board member Jim Hill earlier this week.
To look at the permanent total rewards and total compensation, we thought we needed to get some assistance in doing that, said Hill of the consulting contract.
While the initial bonuses were high they are necessary in any lottery setup, but no such incentives should continue once the critical stages of the startup are in place, said Cohen.
I cant say [Pauls] not doing a good job, said Cohen. But it looks a lot like Martha Stewart, [Michael] Eisner corporate greed.
Paul is expected to receive roughly $350,000 in total bonuses once the books are closed this fiscal year. Her base salary is $350,000. The incentives are based upon startup dates and final proceeds garnered from ticket sales.
TEL employee bonuses totaled approximately $422,000.
The TEL this year beat every deadline set by the board by weeks, upping the bonuses. Additionally, the states lottery has already funded $88 million in first semester college scholarships after only five months. Total net proceeds are estimated at $120 million for the fiscal year.
Nobody has commented on this story yet.