Buried in the news of Mike Thorne's retirement last week was the revelation that the Port of Portland recently boosted his salary to $244,000. According to documents obtained by WW, it appears that the $47,000 annual pay hike to the agency's executive director violates the port's bylaws.
The port commission consists of nine members, four of whom are officers. The agency's bylaws state that "[t]he Commission Officers shall approve the rate of remuneration of the Executive Director."
But WW has learned that then-commission president Bob Walsh--acting without the knowledge of other officers--approved Thorne's 26-percent pay raise Feb. 5 and made it retroactive to last December.
In addition to Walsh, who did not return phone calls, the other officers are Keith Thomson, Michael Powell and Cheryl Perrin. Thomson says Walsh informed of him of the raise after it was given (Thomson had no objection).
Reached on vacation in Turkey, Powell said he was unaware that Thorne had gotten a pay increase. "What raise?" Powell says. "I don't know anything about Mike Thorne's pay raise. I was not consulted."
Perrin has no recollection of any discussion about the move and only learned about it from The Oregonian last week.
In Perrin's view, her lack of involvement raises the question of whether the raise is legal. "I did not know, and I did not approve [the raise]," she says. Port counsel Cory Streisinger says that although port bylaws state that commission officers approve the executive director's salary, the rules do not specify that a vote must be taken or even whether all the officers must participate in the decision.
Legal or not, Thorne's raise, which came after it became clear that he would soon leave his job, angered some commissioners. "I'm shocked," says commissioner Junki Yoshida, who, like Perrin, didn't learn of the pay raise until last week. "I don't understand the basis for this raise."
Perrin also questions the timing of the pay increase. "You usually give someone a raise to keep him around or for a job well done," she says. "We knew Mike was leaving, and commissioners have been unhappy with some of his recent decisions."
While Thorne's raise only will boost his pay for six months, it will make a huge difference in his pension benefits.
A public employee since being elected to the Legislature in 1973, Thorne will draw a pension from PERS. Although the details of his retirement package will remain confidential until after his final day of work, PERS worksheets provide a basis for calculating Thorne's likely benefit.
Under what PERS spokesman David Amick says is the most likely scenario for a public employee of Thorne's salary and years of service, Thorne's pension will probably be based on his last three years' salary. And even though the raise was approved this year, for PERS calculation purposes it increased Thorne's salary for all of last year and all of this year.
Had Walsh not given him the pay raise, Thorne's pension would probably be about $102,000 annually. With the retroactive increase, his annual pension will probably be $17,000 higher, or roughly $119,000.
PERS actuarial tables suggest Thorne should live for another 20 years. Adjust the increase for inflation and it means that although Thorne worked less than three months this year, he effectively received a $350,000 departure bonus in the form of his higher retirement benefit.
Walsh, who resigned from the commission in April after 12 years of service, approved the raise in February after receiving a salary survey conducted for the port by William Mercer Inc.
The survey, dated Dec. 19, showed that Thorne's $194,000 salary was comparable to the pay for executives at other ports but lower than the compensation for the CEO of a typical utility or energy company.
Even with such a comparison in hand, it's unclear why Walsh would approve such a generous raise when the port is under heavy financial pressure from a slowing economy and when he knew Thorne was a short-timer.
Even more puzzling is why Walsh would reward Thorne, whose recent tenure has been marked by multimillion-dollar cost overruns, a loss of international service at the airport, continued failure to gain approval for channel deepening and questionable sales of major port assets, such as the shipyard.
For his part, Thorne denies that there's anything out of the ordinary about his pay increase. "It's based on my performance and market data," he says. "I don't judge my performance, the commission does."
Thorne will leave the port at the end of this week to devote his energy to running for the Democratic gubernatorial nomination.
Even before his pay hike, Thorne's $194,000 salary made him the second-highest- paid head of a public entity in Oregon. Only OHSU's Dr. Peter Kohler earns more: $405,000.
Following his decision in October to rescind his resignation, Thorne took a sabbatical, spending much of January and February at his vacation home in Borrego Springs, Calif.
Thorne served in the Oregon Senate from 1973 to 1991, representing his hometown of Pendleton.