Letter exposes Amtrak’s allocation of $75 million in bonus payments in FY 2023 despite ~$2 billion net loss

WASHINGTON, DC – U.S. Senate Commerce Committee Ranking Member Ted Cruz (R-Texas) and Senator Deb Fischer (R-Neb.) this week sent a letter to Amtrak Chairman and Director Anthony Coscia seeking more information regarding Amtrak’s incentive pay program. The letter points out that for fiscal year (FY) 2023, Amtrak paid out nearly $75 million in bonuses, representing 4% of Amtrak’s $1.75 billion net loss with 14 executives receiving annual bonuses in excess of $200,000.

In the letter, Sens. Cruz and Fischer write:

“We write with concerns over the level of bonuses awarded to top executives and management at Amtrak, especially given the railroad’s dire financial state. C-suite executives of any other corporation that suffered over $1 billion in annual losses would be fired. Amtrak, however, is rewarding them. These bonuses are particularly galling because they come at taxpayers’ expense without Amtrak having achieved even satisfactory performance.

“Every year since its creation in 1971, the National Railroad Passenger Corporation, commonly known as Amtrak, has operated at a loss, buoyed up by taxpayers. In fiscal year (FY) 2023 alone, Amtrak received more than $11 billion from taxpayers. In addition to the company’s financial performance, FY 2023 ridership numbers remained below what they were in FY 2010. Over the past three years, Amtrak’s management has made multi-billion-dollar losses endemic, rendering the large bonuses awarded to managers by the Board in that same period difficult to justify.

“Even when Amtrak has approached full farebox recovery of operating costs, it still lost money, as it did in FY 2019 when the railroad recorded a total net loss of over $880 million. Since the pandemic, Amtrak’s substandard financial performance has devolved further. Although ridership recovered with the lifting of pandemic restrictions, the railroad still incurred a net loss of roughly $2 billion in each of the last three years. Indeed, Amtrak’s net loss in FY 2023 was nearly double its net loss in FY 2019 despite 88 percent ridership levels relative to FY 2019. Meanwhile, total bonus payments in FY 2023 amounted to roughly $75 million, representing more than four percent of Amtrak’s net loss. The railroad has also awarded a greater number of large executive bonuses each of the last three years…

“We understand that Amtrak has been directed to develop an incentive pay program.  But incentive pay must be earned based on performance. Neither financial performance, customer satisfaction, operational excellence, nor capital project success explains the bonuses the Board has awarded. Representatives of Amtrak’s union workforce have called the bonuses ‘exorbitant’  and ‘an affront to Amtrak workers [and] every tax-paying American.’  Passenger advocates agree; according to press coverage, the head of the Rail Passengers Association believes bonuses should be tied to ‘bringing the company back to its prepandemic level and building up from there.’  Because Amtrak’s performance has been poor over the last three years, particularly compared to its prepandemic performance, the Amtrak Board’s decision to continue awarding many bonuses in excess of $200,000 is puzzling.”

As part of the probe, Sens. Cruz and Fischer requested a briefing from Amtrak related to the bonus program to share how the Amtrak Board sets metrics for bonus awards and regarding the proportionality of bonus awards when those awards are necessarily funded by federal taxpayers. The members also asked how the Federal Railroad Administration (FRA) provides oversight of such awards and how the Amtrak Board and FRA are encouraging efforts to reduce operating losses and net losses.

Read the full text of this letter HERE.

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