The Indiana Economic Development Corp. is hoping recent adjustments to its compensation structures—higher salaries and new performance-based pay for its top executives—will convince its staff to settle in and stay for a while.
Though his 2017 salary has not yet been set, Indiana’s new secretary of commerce, Jim Schellinger, could earn close to $300,000 this year through a combination of base salary and performance-based pay.
Over the past year, IEDC has been raising salaries for its top executives and its entire staff, based on the results of a compensation study completed by McCordsville-based Total Reward Solutions LLC in November 2015.
IEDC said it commissioned the study because too many of its staffers were leaving in search of higher pay elsewhere.
“We’d had upwards of 50 percent turnover in the last two years,” said IEDC spokeswoman Abby Gras.
As a result of the study, IEDC officials and a few other top agency executives received salary increases. IEDC also started offering its executives something new—incentive pay they could earn if they met certain performance-based metrics.
The incentive payments come from IEDC’s Works Foundation, which is funded by private donations. Through the first 10 months of 2016—the most recent information available—the foundation reported receiving $1.1 million in contributions. Those contributions came from 17 separate donors, most of them Indiana-based utility companies and regional economic development organizations.
Former Secretary of Commerce Victor Smith, who left the position Dec. 22, received $298,150 in compensation last year. That amount included a $202,000 base salary plus performance pay of $96,150. Smith, who recently joined Indianapolis-based law and lobbying firm Bose Public Affairs Group, made $251,360 in total compensation in 2015.
Performance-based compensation is based on a combination of individual job performance and overall agency performance. Many of those performance goals are confidential because they involve future plans, Gras said. In general, she said, Smith’s performance was evaluated by the Governor’s Office based on factors like the number of job commitments secured by IEDC, and the number of jobs and wage growth associated with those projects.
It remains to be seen exactly how much Schellinger will earn as secretary of commerce.
In his previous position, Schellinger served as IEDC president, a position to which he was appointed in 2015. In that job, he earned a base salary of $185,000. Schellinger declined to accept incentive payments in both 2015 and 2016, Gras said, in order to avoid any conflict of interest, since he had been a member of IEDC's board when it voted to institute the incentive payments.
At the time, Gras said, Schellinger also still had an ownership stake in Indianapolis-based CSO Architects, the firm he led before being hired by IEDC. Schellinger has since “fully disengaged from ownership at CSO,” Gras said. All the formalities associated with that divestiture should be complete by the end of this month, she said.
Schellinger’s 2017 base pay will be determined by Gov. Eric Holcomb, Gras said, and Schellinger hasn’t yet decided whether to accept incentive pay.
But “given the adjustments we have made over 2015 and 2016, we do not anticipate notable increases in 2017,” Gras said.
IEDC board member John Thompson said the pay increases have achieved their goal of reducing turnover.
“We'd had turnover in the past,” Thompson told IBJ late last month. “It's gotten a lot better here lately when you look at the fact that Victor was in this job for four years. I think he's the longest-serving secretary of commerce that we've had in 12 years, and that's a big deal. I'll tell you, I'd like to see the same with Jim Schellinger, that we're able to retain him in this position.”
To date, Gras said, only IEDC’s top leadership team—the secretary of commerce, president, chief of staff and general counsel—have received performance-based pay from the foundation.
Compensation for Chief of Staff Steve Akard rose from $235,474 in 2015 to $271,500 in 2016, while General Counsel Chris Cotterill's compensation increased from $215,000 to $255,500.
IEDC plans to expand the performance incentives to more of the agency's 60 or so employees.
“Future plans include extending performance payments across the IEDC, with performance pay most likely to be next implemented in the Business Development team to tie incentive pay more directly to headquarters relocations, significant job commitment growth, and other metrics,” Gras said.