Senior Execs Group 'Baffled' By Bonus Policy

The group representing senior civil servants is taking issue with the Obama administration’s approach toward bonuses for top employees during sequestration.

The Office of Management and Budget has directed federal agencies to withhold discretionary monetary awards during the sequester “unless agency counsel determines the awards are legally required,” stated an April 4 memorandum to agencies from OMB Controller Danny Werfel. OMB issued similar guidance in February.

OMB said discretionary monetary awards include annual performance awards, which the Senior Executives Association argues are legally required for senior executives.

“It staggers the imagination to think of every agency’s general counsel making an individual determination as to whether a governmentwide statute -- namely, that governing the pay of senior executives -- requires the payment of [Senior Executive Service] performance awards,” SEA President Carol Bonosaro said in a statement.

Title 5 of the U.S. Code includes language regarding SES performance awards. “To encourage excellence in performance by career appointees, performance awards shall be paid to career appointees in accordance with the provisions of this section,” states Title 5, Chapter 53, Subchapter 8, Section 5384. “Such awards shall be paid in a lump sum and shall be in addition to the basic pay paid under section 5382 of this title or any award under section 4507 of this title.”

Title 5 also stipulates that each agency annually will submit to the Office of Personnel Management recommendations for senior civil servants to receive the rank of meritorious executive or distinguished executive. Those employees are entitled to lump-sum payments that are a certain percentage of their annual basic pay, the statute says.

Bonosaro said she was calling on the Justice Department’s Office of Legal Counsel to issue an opinion and settle the matter now, “rather than risk a variety of opinions” from individual agencies.

An OMB spokesman on Monday reiterated Werfel’s April 4 memo. “Agencies’ general counsels must determine that a specific award is legally required in order for that agency to move forward with issuing the award,” the spokesman wrote in an email.

Werfel’s memo said certain bonuses were not considered “discretionary monetary awards” for the purposes of this particular policy, including quality step increases; foreign-language awards for mission-critical language needs; student loan repayments; and recruitment, retention and relocation incentives. “While these items are permitted, in light of current budgetary constraints, they should be used only on a highly limited basis and in circumstances where they are necessary and critical to maintaining the agency’s mission,” Werfel wrote.

Bonosaro said OMB’s interpretation that recruitment, retention and relocation incentives are not discretionary awards is “especially baffling.”

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