Dennis Leone to John Bos re: Compensation for the West Coast investment employees

From Dennis Leone, February 21, 2009
To: John Bos
Subject: RE: Need help to understand something.

John – here is the history on this matter:

1. The board voted 8-1 in September to approve the investment staff bonus compensation for the prior fiscal year 2008 (which ended 6-30-08). The day of the vote, the board received an itemized listing of the individuals and their bonuses in executive session.

2. I noticed during the November board meeting, when the executive director presented his monthly expenditures for board approval, that the total amount shown for fiscal year 2008 bonuses was higher than what the board had approved in September. The answer given that day by Steve Mitchell was that pursuant to prior (?) board action, three “west coast employees” were given higher amounts. Nothing more was said and no other board members asked questions.

3. During the month of January, I asked about the “prior” board action and received email information from Steve Mitchell. He wrote that in 1999, the board adopted a formula to provide the west coast investment employees with higher bonuses. I believe the spirit of the policy at the time surrounded the notion that the cost of living is greater on the west coast. I replied in writing that I did not feel a 1999 board philosophy decision trumps a 2009 board budget decision that approved individual bonuses. I said I felt that if the staff was using a 1999 guideline to award higher bonuses to 3 people, then the board needed to approve the amounts.

4. During the Salary/Benefits Committee on February 18, and again at the regular board meeting on February 20, I took this matter further: I stated that I believed that it was illegal NOT to approve the individual bonuses of the 3 west coast employees, and that the staff was not authorized to pay the additional amounts because the board had not approve them. Mr. Nehf contended that the action of the board in September was sufficient, but he would look into the matter further, and report back to the board in March.

I will bring up this matter again at the March 19-20 board meeting. The staff, in this case, needs to admit that a mistake was made and present the additional amounts for the board to approve………even though it will be after-the-fact. It will be, in my opinion, that only way this matter can be corrected. I will let you know what happens at the March board meeting. Once again, it disappoints me that not one of my fellow board members is questioning this. Sometimes I feel that they do not know what questions to ask.

Dennis Leone

From , February 20, 2009
To: Dr. Dennis Leone
Subject: Need help to understand something.

Dennis,

John Curry told me that some of the STRS Staff were given PBI that were not on the list and approved by the board. Is this true? If so, this may not be a legal expense.

I am waiting for the $$$$ to be posted on the web [on the STRS website]. I plan on raising HELL!!!!!!! if it is not posted by Tuesday.

Thanks for answering my question regarding the "California" staff.

John Bos