A story in today's Los Angeles Times has me seeing red, and one public official seeing dollar signs. The official is the soon-to-be retired president and CEO of a public hospital in Salinas, California - a city of about 150,000.
Two years ago this CEO, Samuel Downing, was given a $3 million retirement payment—again this is a public hospital so he is a public employee, and his salary is paid by taxpayers.
But turns out - Downing wasn't quite ready to retire. So he kept working and keeping the retirement payment, on top of earning $668,000 a year for the next two years— nearly $1.5 million in salary.
Now he is getting ready again to step down, and this week he is getting another retirement payment of nearly $900,000.
So all in all, his compensation for the last two years is more than $5 million.
Oh yea, one more thing… all that is on top of his yearly pension of $150,000.
This enormous sum of money was handed out by the hospital as it was laying off 600 workers. Not all California hospitals play this game. Antelope Valley Hospital in Los Angeles has 150 more beds than Salinas and a thousand more employees, but they offer no supplemental pension plan.
In San Diego, the CEO of a public hospital gets $80,000 a year upon retirement - but no other compensation.
And this is great—when asked about his whopping retirement package, Downing responded, "I think I've earned it".
Well Mr. Downing, the majority of Californians don't think so. An LA Times poll shows 70% support capping pensions for public workers, because, as a state watchdog recently put it, "California retirement plans are dangerously underfunded, the result of overly generous benefit promises, wishful thinking and an unwillingness to plan prudently."
As a result - the Golden State has had to make record cuts. A budget signed by the governor just last month slashed billions from everything including health care. Nearly $6 billion has been cut from social services, including a nearly $2 billion cut from health-care for the elderly and low-income.
Education is another victim, as $1billion has been taken out of the state university system. Not to mention slashing the budget of public safety programs.
I know the cuts are in the billions, and Downing's compensation is in the millions, but every little bit helps right?
I'm sure he was a spectacular and well-respected CEO, but there are limits to how much public officials can take from the public. And I'm not just talking about California—are you listening Illinois?
And on a side note, on his way out the door, Downing is acknowledging concerns over public pensions and switching his employees to a 401 (k)-type plan - not a traditional pension.
How thoughtful of him to think of that as he cashing in on his millions.
Gerri Willis joined Fox Business Network (FBN) in March of 2010. Willis is an anchor and personal finance reporter for the network.