Arkansas' economic development director scores $50,000 bonus

Mike Preston, executive director of the Arkansas Economic Development Commission
Mike Preston, executive director of the Arkansas Economic Development Commission

Mike Preston, the state's economic development director, was paid a bonus of more than $50,000 in private funds by the nonprofit Arkansas Economic Development Foundation after 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.

"It is my recommendation that he be awarded the full bonus of $50,311.80," Hutchinson wrote in a letter dated April 26 to foundation Chairman Gus Vratsinas of Little Rock and released by the commission Tuesday in a response to a reporter's question about Preston's bonus.

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Preston, 32, was paid the bonus on May 2, said commission spokesman Scott Hardin.

He "has been doing a good job. I agree with the governor and so be it," Vratsinas said Tuesday.

Preston started work for the Economic Development Commission in April 2015. He previously served as vice president of government affairs for Enterprise Florida Inc., a public-private partnership between that state's business and government leaders.

"As the numbers indicate, Mike has exceeded expectations in his first year as executive director for AEDC," Hutchinson said Tuesday in a written statement.

"Under his leadership, AEDC has created thousands of jobs, saved hundreds of thousands of dollars in taxpayer money and has merged multiple agencies into the existing AEDC structure -- streamlining processes and saving a considerable amount of money. These factors, among others, is why I recommended to the Arkansas Economic Development Foundation that Mike receive the full bonus available to him," the Republican governor said.

"Our agreement with Mike was to have the bonus paid from the foundation rather than general revenue. I am grateful to the foundation for its support of this bonus structure," Hutchinson said.

The state pays $141,103.04 of Preston's base salary of $167,706 and the foundation pays for the rest, Hardin said.

Preston and other state employees are eligible for a one-time merit bonus of up to 4.5 percent of their salary in the current fiscal year, and Preston's merit bonus will be $6,349.64 (4.5 percent of his state salary) in his June 24 paycheck when other state employees should receive their bonuses as well, Hardin said.

In his April 26 letter to Vratsinas, Hutchinson listed 32 accomplishments by the commission under Preston's leadership during the past year. In what the governor described as "a partial list of accomplishments," the list included working with the governor's task force for the introduction of computer coding in high schools, launching the Arkansas Inc. brand and creating a military affairs program.

Among other things, "118 competitive projects resulted in signed agreements which yielded 4,965 proposed new jobs with a $19.85 proposed average hourly wage (104.4% of the state average wage); $2,012,910,716 proposed capital investment and an average return on investment of tax dollars for proposals was 532%," according to Hutchinson's letter.

On the same day that the governor's letter was written, state officials joined officials of Shandong Sun Paper Industry Joint Stock Co. in announcing construction of a $1 billion pulp mill in Clark County near Arkadelphia. The mill is expected to employ up to 250 people.

The commission's accomplishments also included two international business recruitment missions (one in France and Germany, the other in China and Japan) and four domestic recruitment missions (Atlanta, California, Dallas and New York), the governor said.

The merger and reorganization of the Arkansas Science and Technology Authority and the Department of Rural Services into the Economic Development Commission resulted in increased efficiency and leverage resources, including the elimination of 15 positions saving $645,000, according to Hutchinson's letter.

"Throughout this [past] year, I have been impressed with Mike's 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.

Legislative leaders said Tuesday that Preston has performed well as the Economic Development Commission's executive director and they are largely reluctant to second-guess Hutchinson's judgment on the size of Preston's bonus.

Hutchinson "set the parameters and it's up to the governor's office, where it falls within the parameters," said Senate President Pro Tempore Jonathan Dismang, R-Searcy.

House Speaker Jeremy Gillam, R-Judsonia, said, "That's really more their call than ours. I do think he has done a good job."

Senate Democratic leader Keith Ingram of West Memphis said, "I'm sure the governor feels [Preston's bonus] is well deserved and, from my observation, he is somebody we want to keep on Arkansas' economic development team.

"I think Mike Preston is a pro and he is one of the best hires the governor has made," said Ingram, a frequent critic of Hutchinson.

"We came a long way with [former commission Executive Director] Maria Haley and [Democratic Gov. Mike Beebe] in eight years and Mike [Preston] has really built on that. He is aggressive and has a good sense of what to do to recruit and retain industry," Ingram said.

House Democratic leader Michael John Gray of Augusta said Preston has been great in his limited dealings with him.

Economic development is crucial to the state, and if Hutchinson believes that Preston is advancing economic development in Arkansas, "who am I to question it?" Gray said.

But he said that the Republican-dominated Legislature heeded Hutchinson's recommendation not to provide state funding for a cost-of-living raise for state employees in the fiscal year, starting July 1, after their workloads have been increased under the guise of efficiency.

In the state's fiscal session this year, the Legislature and Hutchinson enacted a $142.7 million increase in the state's fiscal 2017 general revenue budget to $5.33 billion. Most of the increased funds will go to the Department of Human Services and to public schools in the general revenue budget, which factors in a nearly $101 million income tax cut enacted by the 2015 Legislature and Hutchinson.

Hutchinson has ordered the finance department's office of personnel management to review employee pay plans and personnel policies, and "this review will result in the development of new, more-competitive pay plans and streamlined policies, which will be implemented by July 2017 for the 2018 fiscal year," finance department Director Larry Walther has said.

A Section on 06/01/2016

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