Varga Praised, Rewarded For Leadership

September 1, 2006
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GRAND RAPIDS — The Interurban Transit Partnership board voted unanimously Wednesday to give Peter Varga a $16,278 raise as well as a 6 percent bonus for the year for “greatly exceeding” board expectations in his role as CEO of The Rapid.

Varga’s salary will increase from $135,782 to $152,060 effective Oct. 1. The ITP Governance Committee recommended the $152,060 salary based on the salaries of Varga’s peers in neighboring cities. The CEO of the Lansing’s Capital Area Transportation Authority, for instance, earns a salary of $158,370, while the CEO of the Ann Arbor Transportation Authority earns $145,750. The Governance Committee determined that Varga’s salary should be increased to the mid-point of those two Michigan peers.

The board approved a bonus schedule for the CEO’s performance, as well: a 3 percent bonus for performance that “exceeds board expectations” and a 6 percent bonus for performance that “greatly exceeds board expectations.” Simply meeting board expectations would not generate a bonus. The Governance Committee unanimously recommended the 6 percent bonus this time around.

Board members heaped praise on Varga for transforming The Rapid into a nationally recognized transit system.

Tom Guinther, chair of the ITP’s Strategic Planning Committee, said The Rapid is, without question, a premier transit system in the country, and that there ought to be additional compensation awarded the CEO for that.

“It’s time for us to realize that we have gained national prominence as a transit center. Peter has provided that leadership,” Guinther said. “One thing I would hate to see is The Rapid lose Peter to another agency merely because we have not set his salary at a comparable level. That would be a disaster.”

Varga’s accomplishments for the year filled an entire page of the Governance Committee’s evaluation report. Those accomplishments include: the successful passage of a 25-year funding bill for ACT 1906 transit agencies; garnering the respect of federal, state and local leaders; development of the first LEED-certified transit facility in the country; federal and state funding successes; bus ridership growth of 17 percent; and improvements at The Rapid, such as implementation of the comprehensive operation analysis, the launch of Air Porter service, and bus stop and shelter improvements.

“This has been an extraordinary year,” said board Chairwoman Carol Sheets. “There have been many, many awards that Peter has earned for The Rapid and for himself, personally.”

Rick Morris, who represents East Grand Rapids on the board, suggested that Varga’s salary be based on a national salary comparison among peers rather than a statewide salary comparison. 

“If you’re worried about losing him to Columbus, Ohio, or Columbia, South Carolina, or some place like that, then his salary base needs to have more of a national feel,” Morris said. “I would expect that in this kind of job, the executive search firms of the world know who he is and where he is. I’m not so sure picking Lansing and Ann Arbor are necessarily the right means of comparison. I think we should look beyond just Michigan.”

Sheets said the board did look at comparable salaries throughout the United States.

“There are so many variables in those comparables that we felt for this year it would be best to take the Michigan comparables,” she noted. “However, Peter has been courted by other cities, and we want to keep him here. He has done an outstanding job for us, and behind him sits his outstanding team; they have also done a super job.”

Mayor George Heartwell said the ITP is “incredibly fortunate” to have Varga leading The Rapid. He wholeheartedly supported both the raise and the bonus.   

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