For the second consecutive year, the state’s economic development director, Mike Preston, has received a bonus of more than $50,000 in private funds from the nonprofit Arkansas Economic Development Foundation.
Gov. Asa Hutchinson recommended the bonus.
Preston, executive director of the Arkansas Economic Development Commission, is eligible for a performance-based bonus of up to 30 percent of his base salary of $167,706 a year.
“The bonus structure was part of the original employment contract with Director Preston,” Hutchinson said Wednesday in a written statement.
“His performance is reviewed each year, and any approved bonus is paid by the AEDC Foundation. His performance has continued to excel in every category, and that is the reason the bonus was approved. This is all routine and not triggered by any other factor.”
Hutchinson recommended that Preston be awarded the full bonus of $50,311.80 in a three-page letter dated May 11 to foundation Chairman Gus Vratsinas of Little Rock. The letter was released by the commission this week in response to a reporter’s request.
Preston received the check from the foundation May 26, commission spokesman Scott Hardin said. Last year, Preston received a bonus of the same amount from the foundation.
Preston has “done a good job,” Vratsinas said this week.
“We are trying to be competitive in the state, no different than Bret Bielema and Mike Anderson,” the foundation chairman said, referring to the University of Arkansas, Fayetteville’s head football coach and head men’s basketball coach, respectively.
“I hope we are having this conversation next year, because that means there has been a lot of activity,” said Vratsinas, who also is chairman of the board for Bailey Construction and Consulting.
Asked whether other states have similar contracts for their economic development directors, Hardin said, “Numerous states, particularly in the South, maintain employment contracts with state employment directors that include additional private funds in the director’s overall salary.”
Bielema is paid an annual salary of $4.2 million through the university’s athletic department and Razorback Foundation and received $125,000 in bonuses this year, said Kevin Trainor, a spokesman for the athletic department.
Anderson is paid an annual salary of $2.45 million through the athletic department and the Razorback Foundation and has received $250,000 in bonuses this year, Trainor said. The athletic department is self-supporting and doesn’t receive tax dollars, he said.
Both bonuses “were a mix between … academics and athletics related compensation,” Trainor said in an email.
Preston started working for the Economic Development Commission in April 2015 and previously served as vice president of government affairs for Enterprise Florida, a public-private partnership between that state’s business and government leaders.
Arkansas pays $141,103.04 of Preston’s base annual salary of $167,706 and the foundation pays the rest, Hardin said.
In addition to receiving the $50,311.80 bonus in private funds from the foundation last month, Preston also will receive his annual merit bonus from the state that will equal 3 percent of his base state salary of $141,103.04, which is $4,233, Hardin said.
Along with other state employees, Preston’s merit bonus will be included on his June 23 paycheck, Hardin said.
Employees who work at state agencies other than two- and four-year colleges are eligible for up to 3 percent merit bonuses in fiscal 2017, which ends June 30, based on the employee’s performance evaluation.
In his May 11 letter to Vratsinas, Hutchinson cited 26 accomplishments — which he called a “partial list” — by the Arkansas Economic Development Commission under Preston’s leadership.
Among other things, “for calendar year 2016, won 82 competitive projects resulting in signed incentive agreements, which yielded 4,098 new jobs with a $21.55 proposed average hourly wage, and a capital investment of $1,388,788,099,” according to Hutchinson’s letter.
“Since 2015, the total number of competitive projects won is now 120, bringing in more than $4 billion in new capital investment and 10,000 new jobs.”
The accomplishments listed by Hutchinson also included turning back $1.01 million in savings to the state at the end of fiscal 2016; awarding 385 grants totaling $12.8 million; creating and filling the new position of military affairs director; conducting international business recruitment missions to the United Kingdom, Germany and China; and opening a European office in Berlin, according to Hutchinson’s letter.
Hutchinson said in his letter that he’s worked closely with Preston during the past two years.
“We conducted multiple recruitment trips overseas, held scores of business recruitment meetings, and attended numerous community engagements focused on economic development,” according to the governor’s letter.
“Throughout Director Preston’s tenure, I have been impressed with his professionalism, determination, focus, energy and character. He has poured himself into Arkansas and has gone the extra mile every day to assure that our state is an economic engine for growth and increased opportunities for Arkansans,” Hutchinson wrote in his letter.
Asked about Preston’s $50,000-plus bonus, legislative leaders said it’s up to the governor to help determine the size of Preston’s bonus.
“He has had some success,” said Rep. Lane Jean, R-Magnolia, who is co-chairman of the Joint Budget Committee.
“I guess we had a hand in Forrest City and Glenwood [economic development projects]. I’m encouraged, but I will leave the raises and bonuses to the governor,” he said.
Senate Democratic leader Keith Ingram of West Memphis said Preston “has done an outstanding job.
“I think he had a great pedigree when he came here, and I think he’s produced,” he said.
Sen. Joyce Elliott, D-Little Rock, said she’s “fine” with Preston’s bonus if he’s earned it, “except that I don’t really think that’s a good way to compensate public employees, especially if people get such measly merit bonuses [of up to 3 percent] as other state employees.
“I don’t know that it had to be $50,000,” she said.