Corporate Office 1000 Catawba Street Columbia, SC 29201 TEL (803) 799.4070 FAX (803) 252.7642 June 30, 2011 Kevin Dietrich The Nerve 1323 Pendleton Street Columbia, South Carolina 29201 Dear Kevin, Further to your inquiries via e-mail of June 20, 2011 and March 21, 2011 about SCRA compensation records, referencing your organization’s FOIA request of SCRA dated November 19, 2010, SCRA is hereby providing the following additional information. SCRA has responded in full compliance with SC state law to every FOIA request made of it by either your blog, or its affiliate, the SC Policy Council, dating back to 2008. Those responses (see attached) have included extensive documentation about SCRA and its operations. SCRA also supported a voluntary education exchange with you and your peers in June 2010, where many of the facts below were explained directly to you, and further significant documentation was provided to you. As you recall, the copy of the SCRA IRS 990 filing requested by you under FOIA in November, 2010 was previously provided to your organization in December, 2010. The timing of that delivery and its accompanying cover letter was also in full compliance with requirements of state law. Since the IRS 990 details the compensation for the top employees within our organization, SCRA believes that its IRS 990 report contains a significant portion of the compensation information requested. With respect to your additional requests for compensation details, after considerable deliberation, SCRA has provided the information in the second part of your November, 2010 request in the attached spreadsheets. SCRA has provided this information as a demonstration of its commitment to transparency, and in recognition of SCRA’s public mission, despite SCRA's possible exemption from compliance on the following bases: 1. Since 2006, SCRA has provided base salary information to The State Newspaper for all employees earning $50,000 or more per year. That information is posted on the newspaper’s website. SCRA has provided that information as a historical demonstration
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Corporate Office 1000 Catawba Street Columbia, SC 29201 TEL (803) 799.4070 FAX (803) 252.7642
June 30, 2011 Kevin Dietrich The Nerve 1323 Pendleton Street Columbia, South Carolina 29201 Dear Kevin, Further to your inquiries via e-mail of June 20, 2011 and March 21, 2011 about SCRA compensation records, referencing your organization’s FOIA request of SCRA dated November 19, 2010, SCRA is hereby providing the following additional information. SCRA has responded in full compliance with SC state law to every FOIA request made of it by either your blog, or its affiliate, the SC Policy Council, dating back to 2008. Those responses (see attached) have included extensive documentation about SCRA and its operations. SCRA also supported a voluntary education exchange with you and your peers in June 2010, where many of the facts below were explained directly to you, and further significant documentation was provided to you. As you recall, the copy of the SCRA IRS 990 filing requested by you under FOIA in November, 2010 was previously provided to your organization in December, 2010. The timing of that delivery and its accompanying cover letter was also in full compliance with requirements of state law. Since the IRS 990 details the compensation for the top employees within our organization, SCRA believes that its IRS 990 report contains a significant portion of the compensation information requested. With respect to your additional requests for compensation details, after considerable deliberation, SCRA has provided the information in the second part of your November, 2010 request in the attached spreadsheets. SCRA has provided this information as a demonstration of its commitment to transparency, and in recognition of SCRA’s public mission, despite SCRA's possible exemption from compliance on the following bases:
1. Since 2006, SCRA has provided base salary information to The State Newspaper for all employees earning $50,000 or more per year. That information is posted on the newspaper’s website. SCRA has provided that information as a historical demonstration
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of our commitment to transparency under FOIA, and in recognition of SCRA’s public mission, despite the following facts:
• SCRA employees are not employees of the State of SC. • SCRA employee compensation is not paid for by SC state taxpayers, but by SCRA
Applied R&D contracts. • SCRA has a private pension plan, and SCRA employees do not participate in the
state retirement system. • SCRA generates its own revenues, and there is no line item in the SC state budget
for SCRA. 2. SCRA is a SC-based, publicly-chartered technology services corporation, formed under
the IRS 501(3)(c) regulations, which is obliged to generate its own revenues – without SC state budget support – by marketing services and products in competition with many other formidable competitors, including IBM, SAIC, Accenture, Alion, Booz and Company, and Mitre Corporation, to name but a few. For the record, none of these known competitors are located principally in SC; SCRA is not aware of any private enterprise based in SC engaged in technology services competitive to SCRA. On the other hand, SCRA regularly assists scores of SC-based private enterprises in accessing Federal and capital markets, improving innovation rates and costs, providing first-class facilities and support infrastructure, and developing business.
3. As a technology services corporation, our professional workforce is our means of
production, and our total labor costs are a critical factor in pricing bids vs. competition. Publishing the information you have requested could enable competitors to accurately compute SCRA’s total labor costs, and hinder or harm SCRA’s required ability to compete in the free marketplace. Furthermore, publishing the information you requested incrementally exposes our workforce to recruiting raids from competitors, harming our means and ability to perform our public mission on behalf of South Carolina.
4. SCRA uses the internationally-recognized Hay Group as an external reference for
benchmarking SCRA compensation, and has done so with oversight from SCRA’s Board of Trustees since 2004. Per the Hay Group, SCRA base salaries and total compensation levels as provided here still range well below the national industry average. Also, because SCRA competes globally for its revenues and workforce, Hay Group analysis shows that there are no relevant “local discounts” that should be applied to SCRA compensation because we are headquartered in SC. Noteworthy: SCRA does not enjoy any SC-based geographic monopolies, or other unique state government connections which lead directly to revenue. Our results are won in open competition in the free market, like any other technology services business.
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As an economic development engine, SCRA's recent business acceleration has enabled the enterprise to over-deliver on its public mission, namely to help develop hi-tech businesses within SC. As reported in economic output studies by USC's Moore School, SCRA has cumulatively contributed nearly $14B over 27 years to the State's economy, up from $6.9B five years ago, and has helped create over 15,000 technology-related jobs in the State, with annual per capita wages ranging from about $55K to about $77K. This economic output is the return the State has realized on its one-time capitalization of $500,000 and 1,400 undeveloped acres granted to SCRA at its founding. Established as an adjunct to SCRA in 2006, the SC Launch program has helped form or locate in the State approximately 230 startup entities, some 62 of which have licensed basic technology from in-State universities, and the top 45 of which have to date attracted over $130M in add-on private equity investment. Since 2008, SCRA's SC Launch program has been recognized by the Southern Growth Policies Conference, The State Science and Technology Institute, the International Economic Development Council, CEO magazine, and Forbes magazine as a regional, national, and international leader in both entrepreneurial support and technology-based economic development. In the same window, SCRA has earned awards from the Alfred P. Sloan Foundation, the Wall Street Journal, The Economist, and the International Economic Development Council for workforce excellence and collaborative technology and economic development leadership.
5. Under Federal Acquisition Regulations, SCRA is obliged to annually submit its price
structure (“rate base”) to Federal Audit agencies for examination and approval in advance. The rate base encompasses SCRA total labor costs, which are reviewed in part for the appropriateness of compensation levels. In 27 years of submissions, SCRA has never had a rate base disallowed by Federal Auditors, and we expect that record to continue. Due to competitive sensitivity of rate bases, the Federal Government protects such information as company confidential and proprietary, and does not provide such information to inquiries under FOIA. The Federal Government and several public interest websites do publish legally obligatory and significant information about non-profits and their contracts, and SCRA regularly complies with all these regulations. Accordingly, transparency and accountability have been, and are today, embedded principles and practices within SCRA. They are ingrained in SCRA's Corporate DNA, based upon both Federal and State requirements. By Federal law, SCRA's Federal contracts are posted on multiple public access websites, as are SCRA's IRS 990 and Federal A-133 submissions. The Corporation is obliged to pass and has never failed regular audits by the DoD's Defense Contract Audit Agency, Defense Security Service, and HR practice examinations by the Equal Employment Opportunities Commission.
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At the State level, SCRA is obliged to provide and has without-fail filed annual reports to the Legislature on its operations and the SC Launch program. In addition, SCRA has been subject to annual audits of its financials by national independent audit firms. In 2010, SCRA received its 27th consecutive unqualified public audit opinion, the highest outcome possible under a public audit. Further, in 2005, SCRA was examined by the Legislative Audit Council, which found that SCRA spent its money wisely, and was faithfully and properly fulfilling its public mission. These documents are all available on the web, as was voluntarily documented to your organization last year (see e-mail to Eric Ward, September 28, 2010, attached).
Because of considerations raised in points 1 – 5 above, SCRA respectfully requests in the spirit of responsible public purpose and discourse, that The Nerve and its affiliated organization, the SC Policy Council, take good care to ensure that your use of the disclosed information does not in any way harm SCRA’s ability to carry out either its contractual obligations or its legislatively-and federally-mandated missions. If you or your organization would like to discuss these facts in more detail, I would be happy to arrange a meeting to cover them with you. Sincerely,
Bill Mahoney CEO Attachments: Spreadsheets Doc to Kevin Dietrich December 14, 2010 E-mail to Eric Ward September 28, 2010 Docs to Eric Ward June 2, 2010 Doc to Ashley Landess December 9, 2008 cc: SCRA Executive Committee SCRA Performance and Compensation Committee George Wolfe, Nelson Mullins Riley & Scarborough
Name Grade Title Desc Base Salary
Performance Based
Variable
Compensation
Over
Performance
Bonus
Other Bonus Sign On
William Mahoney 26 Chief Executive Officer 253,436.06$ 125,189.00$ October-10
Gregory Frank 25 Senior Chief Officer 218,081.62$ 86,400.00$ October-10
Julia Martin 24 Chief Officer 205,919.62$ 84,447.00$ October-10
Richard Self 24 Chief Officer 201,578.02$ 85,504.00$ October-10
Robert Kiggans 24 Chief Officer 92,400.00$ 73,813.00$ October-10
John Gregg 23 Sr. Executive Vice President 190,100.12$ 78,678.00$ October-10
David McNamara 22 Executive Vice President 164,175.24$ 51,274.00$ October-10
Frank Cox 22 Executive Vice President 161,796.07$ 57,116.00$ October-10
Natalie Corella 22 Executive Vice President 161,269.45$ 47,849.00$ October-10
Marvin Davis 22 Executive Vice President 153,873.99$ 47,410.00$ October-10
Kevin Carpentier 21 Sr. Vice President 159,909.00$ 35,362.00$ 10,000.00$ October-10
David Ramsey 21 Sr. Vice President 148,623.84$ 36,932.00$ October-10
Christopher Van Metre 20 Vice President 145,759.73$ 32,400.00$ 10,000.00$ October-10
Mark Aukamp 20 Vice President 141,558.38$ 27,216.00$ October-10
Russel Keller 20 Vice President 141,555.03$ 15,529.00$ 10,000.00$ October-10
Scott Beeson 20 Vice President 140,000.00$ -$
Thomas McCord 20 Vice President 140,000.00$ -$
Gerald Graves 20 Vice President 139,870.00$ 12,823.00$ October-10
Catherine McDowell 20 Vice President 139,431.13$ 19,175.00$ October-10
Deborah Davidson 20 Vice President 137,131.44$ 26,301.00$ October-10
Scott Savoie 20 Vice President 135,947.13$ 24,192.00$ October-10
Buddy McAlister 20 Vice President 134,071.13$ 20,160.00$ October-10
Martin Ryan 19 Director 146,896.05$ 25,056.00$ October-10
Charles Rowe 19 Director 133,563.16$ 23,056.00$ October-10
Michael Gwyn 19 Director 132,752.14$ 24,452.00$ 10,000.00$ October-10
Harry Hillman 19 Director 130,742.14$ 19,323.00$ October-10
Linda Kacala 19 Controller 128,504.34$ 17,568.00$ October-10
Gregory Jaeger 19 Director 123,104.14$ 17,820.00$ October-10
Brian Piedfort 19 Director 120,223.14$ 13,386.00$ October-10
Timothy Little 19 Director 106,150.00$ 14,330.00$ October-10
Valerie Thomas 18 Sr. Program Manager 169,000.00$ -$
James House 18 Sr. Program Manager 127,300.00$ 13,527.00$ October-10
Richard Tiano 18 Sr. Program Manager 118,108.04$ 18,244.00$ October-10
Dennis Simon 18 Sr. Program Manager 108,620.62$ 10,291.00$ October-10
Roger Radley 18 Sr. Program Manager 108,381.46$ 18,270.00$ October-10
Gerardina Pelto 18 Sr. Program Manager 106,974.46$ 16,632.00$ October-10
Thornton White 18 Sr. Program Manager 106,304.46$ 15,606.00$ October-10
Dale Orren 18 Sr. Program Manager 106,270.96$ 7,956.00$ October-10
Derek Willis 18 Sr. Program Manager 105,399.96$ 12,978.00$ October-10
