Austin News

U.S. Senate Commerce Committee Ranking Member Ted Cruz (R-Texas) and Senator Deb Fischer (R-Neb.) have sent a letter to Amtrak Chairman and Director Anthony Coscia seeking detailed information regarding Amtrak’s incentive pay program. The inquiry follows the revelation that nearly $75 million in bonuses were paid out in fiscal year (FY) 2023, despite the company incurring a net loss of approximately $2 billion.

In their letter, Senators Cruz and Fischer express concern over the scale of bonuses awarded to top executives and management at Amtrak amidst its financial struggles. They wrote: “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.”

The senators highlighted that since its establishment in 1971, Amtrak has consistently operated at a loss, sustained by taxpayer funding. In FY 2023 alone, Amtrak received more than $11 billion from taxpayers while ridership figures remained below those recorded in FY 2010. They pointed out that despite achieving near full farebox recovery of operating costs in FY 2019, Amtrak still reported a net loss exceeding $880 million.

The letter further noted that following the pandemic, Amtrak's financial performance has deteriorated significantly. Despite an increase in ridership post-pandemic restrictions, the railroad incurred net losses of around $2 billion annually over the past three years. The senators remarked on the inconsistency between these losses and the substantial bonuses awarded to executives during this period.

“We understand that Amtrak has been directed to develop an incentive pay program,” they wrote. “But incentive pay must be earned based on performance.” The senators emphasized that neither financial performance nor customer satisfaction justified the bonuses granted by the Board.

Representatives from Amtrak’s union workforce have described these bonuses as “exorbitant” and “an affront to Amtrak workers [and] every tax-paying American.” Passenger advocates also questioned the rationale behind such payments, with one suggesting that bonuses should be linked to restoring prepandemic performance levels.

As part of their investigation, Senators Cruz and Fischer requested a briefing from Amtrak on how bonus metrics are set by its Board and how these awards are proportionate given federal taxpayer funding. They also sought information on how the Federal Railroad Administration oversees these awards and what measures are being taken to reduce operating losses.

Read the full text of this letter HERE.

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