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Tenn. lawmaker balks at high lottery pay for vice presidents

Sep 26, 2003, 3:12 am

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Tennessee LotteryTennessee Lottery: Tenn. lawmaker balks at high lottery pay for vice presidents

A state legislative leader said he hoped that Tennessee's lottery would pay its top officials less than top executives at the Georgia lottery were paid when Rebecca Paul was director there.

Paul, the new Tennessee lottery director who officially came from Georgia this week, had a dozen lottery vice presidents working for her in Georgia ⬠five of them earning $151,000-$180,000 a year, including bonuses.

''That seems to be on the high side,'' said state Sen. Ron Ramsey of Blountville, Senate Republican Caucus chairman. ''That's higher than what anyone else in state government would be making.''

Most Tennessee government department heads ⬠the commissioners who make decisions â¬earn $92,376 a year, although there are exceptions that allow higher pay. Most second-tier executives ⬠deputy and assistant commissioners ⬠earn between $75,000 and $85,000 although, again, there are exceptions.

In South Carolina, which is the nation's newest lottery until Tennessee starts selling tickets, an executive director and chief operating officer run the organization. They have six directors, who make $82,400-$111,240. None is eligible for bonuses.

Paul, whose salary as Tennessee lottery director could reach $752,500 this year, said she had not yet decided on the executive structure she will recommend to the lottery board, which has the final decision on staffing and compensation.

Nor, Paul said, does she yet know the salaries she will recommend for her top executives, but she added, ''I would hope we will pay competitive salaries.''

Members of the lottery board's human resources committee might meet as early as today to begin discussing staffing and salaries.

Paul is working to hire six to eight people who have lottery experience for the senior-level positions, making it unlikely that they will be Tennesseans.

First up is a vice president for human resources, a position that she said she hoped to have filled by today.

When asked if she expected the Tennessee lottery to be competitive with what Georgia pays, she said, ''That's something the board needs to talk about.''

Paul's own salary places her atop all other lottery chiefs in the nation and has come under some criticism.

She was paid $500,000 at Georgia's lottery last year ⬠a $290,000 base plus a $210,000 bonus.

Paul's base salary in Tennessee, $350,000, was set by adding 20%-25% to what she made in Georgia, which board members said was a customary practice used by recruiting firms.

Board members have not said if they plan to use that practice in recruiting vice presidents or if those vice presidents will be eligible for bonuses.

Ramsey, who complained that Paul's compensation was ''obscene,'' said he understood the realities of paying market rates for salaries, but he questioned whether lottery executives should be the highest-paid people in state government.

''Every dollar taken away for salaries could have been put into scholarships or prizes.''

Ramsey, who voted in the legislature last year for both lottery bills, said he personally opposes the lottery.

Lottery board member Jim Hill of Chattanooga, chairman of the human resources committee, said the board would wait for Paul's recommendations on everything from an organizational structure to compensation packages.

''We haven't talked about it,'' Hill said.

When Paul started the Georgia lottery 10 years ago as its CEO and president, she had a chief operating officer. That position has been eliminated, and the top staff includes five senior vice presidents and seven vice presidents, all eligible for bonuses.

A draft of a proposed organizational structure for the Tennessee lottery prepared by lottery board member Deborah Story, a human resources consultant, shows eight department heads reporting to the CEO: operations/administration, finance, sales, human resources, general counsel, security/internal audit, information technology and marketing/advertising/public relations.

Paul said she has some of her own thoughts.

''There are a number of ways to organize a structure. The board will talk about what they think is best for Tennessee and I'll talk about what I think is best for the lottery.''

Comparing lottery officials' salaries

Here are the salaries of senior officials at the Georgia and South Carolina lotteries and the salaries of the heads of some of the largest and most complex departments and agencies in Tennessee state government.

x-Salaries for senior officials of Georgia lottery

y-Cathy Walls, Senior VP of corporate affairs, $180,000

Wanda Wilson, Senior VP and general counsel, $180,000

Andy Davis, Senior VP of finance & information, $175,000

Sidney Chambers, Senior VP of sales, $160,000

Joan Schoubert, Senior VP of administration, $151,000

Salaries for senior officials at South Carolina lottery

Pat Koop, Director sales & marketing, $105,029

Dale Rhodes, Director, finance, $97,850

Hogan Brown, Director, legal services, $111,240

Tom Marsh, Director, security, $82,400

Ernestine Middleton, Director, internal operations, $91,928

Liz Mason, Director, information technology, $102,742

Salaries for top Tennessee officials

Gerald Nicely, Transportation commissioner, $92,376

Michael Miller, Children's services commissioner, $92,376

Quenton White, Correction commissioner, $92,376

Betsy Child, Environment & Conservation, $92,376

Matt Kisber, Economic & Community Dev., $98,316

Dave Goetz, Finance commissioner, $131,124

Kenneth Robinson, Health commissioner, $136,416

Manny Martins, TennCare director, $196,680

z-Phil Bredesen, Governor, $85,000

x-Salaries include a $40,000 incentive bonus paid to each official last year. Does not include seven other vice presidents. All had a base salary less than $100,000, but all also were eligible for bonuses. y-Has since been promoted to acting director. z-Bredesen has chosen not to draw a salary. Sources: State lotteries and Tennessee Department of Personnel.


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