On Sunday, Nov. 23, the Lexington Herald-Leader arrived on doorsteps bearing the headline "A Sky High Expense Account" above an article critical of the salary, travel and perks of airport Executive Director Michael Gobb. Mr. Gobb had referred all questions concerning his compensation to Bernard Lovely, chairman of the Lexington-Fayette Urban County Airport Board. After expressing concerns about the article Mr. Lovely agreed to an interview with Business Lexington editor in chief, Tom Martin. The following is condensed from a lengthy discussion of the issues raised in the Herald Leader article. To hear the full interview, please listen to the accompanying podcast.
Your reaction to the article?
I got a response this morning from an acquaintance who, well let me just read part of what he said: "I will never understand how newspaper reporters almost always miss the point. Obviously they need to sell papers but they use pieces or parts of the story and leave the reader either angry or confused. Blue Grass Airport has gone from genuinely nice but nothing special to one of the greatest facilities in the United States during this board's and Mike Gobb's tenure." And that's the part of the story I think they missed. There was no discussion of the new concourse, the renovations that have happened, ignoring the fact that we have a New York Times Bookstore in this little airport.
... They talk about enplanements (passenger traffic) being down. I think she said 1 percent between 1999 and 2008, but she did ignore the fact that in 2007 enplanements were up 3 percent - the very time period that these expenses were covering.
Why does Mr. Gobb's compensation package include benefits such as unlimited use of an airport vehicle, unlimited gas, home Internet and cell-phone service and club memberships?
Actually it's been our experience that almost every airport director or at least a number of them have a car allowance or an expense allowance, so that is not uncommon at all. You know the other perks are not uncommon either. I suppose some people may have a question about why an airport director who thinks that he has to travel so much internationally needs to have membership in several local clubs. But that is real easy to answer if we look back to the time when Mike came here. If you remember, this airport was in a great deal of turmoil. The city might have been 80 percent against the airport and 20 percent for because there was this discussion of building a parallel runway, maybe adding a cargo facility. This airport was in a tough position. The Board at that time interviewed several candidates internally and externally and decided upon Mike because of his experience and his personal skills but more particularly, because they thought that Mike was the kind of person who could heal the divisiveness in this community. And he was charged by the original board and by all boards since to go out into this community and be a good citizen, let the airport become a good citizen, make Lexington, Kentucky proud of its airport. That's what Mike did.
Why do you provide the airport director with cell phone and home Internet services?
It's important to provide telephone service to them. Same way with Internet service. Mike Gobb and all of our executives at the airport do not have 9-to-5 jobs. They need to go home some, they need to be with their families but that doesn't mean they don't need to work later at 8:30 after the kids go to bed or 9:00. So we provide those services for Mike and we think we gain great benefit for that. And the community, more importantly, the community benefits from it.
Why does the board want airport executives to belong to clubs and organizations?
I think it's important for every airport to be a vital member and citizen in its community. I think it's important that the airport stay in the front of its citizens' minds, particularly the business community so that they won't think of another airport. If they think of an airport they think of Bluegrass Airport.
... When Mike was hired this community was divided in respect to this airport and what it should become. People were driving to Cincinnati and Louisville to take flights. Our facilities weren't as good but more importantly the airport wasn't well thought of by this community because there was talk of making it a cargo airport, making it be like Louisville and so we would have FedEx jets flying in and out of here 24 hours a day over our beautiful countryside and so the community was really divided about where we should go. When Mike was hired he was charged with becoming a good citizen of this community and raising the image of the airport in this community and establishing that Bluegrass Airport was as important to this community as Lexmark, as the University of Kentucky, as any other major business that we have in this community and that is done in part by being a member of certain organizations and certain clubs that you can go to and see. So that's how it happened.
This airport was thought of as a leading citizen of this community and a citizen that represents unity and moving forward, and we, the board, think we've done that through our encouragement and direction to Mike. But it couldn't be done without his personal skills. You can send a lot of people to a meeting but if they aren't going to command any respect they might as well not be there. Mike Gobb, as anyone that knows him, is an extraordinarily talented individual and an individual who could be an executive director at any number of airports in this country, any number of larger airports, but he's here because he loves this community. And that helped him love it. To be out and be a member of these clubs and get involved you know this became home to him. And I remember early on we were always afraid each year that Mike was going to announce that he was going to leave and take a job somewhere else, but he never did. And now he'll tell you he'll never go anywhere else because he loves this community.
Are you concerned that he might now feel more inclined to accept one of those offers?
Mike can't be happy to be attacked. I mean look at the picture with Mike and his wife and his daughter meeting the Queen. What does that have to do with anything? It was in Lexington, Kentucky. The Queen landed here because we had facilities here that enabled her to land her big plane. We could provide the security that she needed and you know frankly it probably made more sense for Presidents and Queens and so on to fly into Louisville or Cincinnati but we have the facilities and when they visit here they would fly here. Our Executive Director and his family meet her and then they get put on the page with the picture of their ten-year-old daughter "When he travels, he does it in style." I don't know what meeting the Queen has to do with that.
... I think to a man and woman, the ten members on the Board of Directors will encourage Mike to stay here, to not respond negatively to this article. And I think to a person they will confirm what I've said today.
Of course they (Herald Leader) talked a lot about how the other board members would decline to comment, but that's just because they were plagued to death and we were getting daily open records requests and we were providing them and then they were going around and making statements that were untrue to the board members trying to get some reactions. So they just decided not to talk, have one spokesperson, the spokesperson who knew the most about what was going on in respect to the requests that were being made and the answers that were being given. They try to make Mikes salary look bad, but you know there are hundreds of airports in this country but they just called seven or eight. We happen to know they called others but they aren't in here, they must not have told them what they wanted to hear. So they picked and chose the airports that they wanted to compare us to and it's just not fair. Frankly we asked them when we started getting calls from other airports asking us what was going on because they called them. We said who have you called we'll be glad to help and direct you to airports that are actually comparable to us. Oh no, they wouldn't have that. And then they wouldn't tell us who they had talked to. They said well you will see it the newspaper. Well yeah we've seen it. We know they've talked to other people but they didn't choose to print those comments. They choose to only print the comments of the airports where they can say they didn't spend as much money on marketing and travel as we did. And they didn't pay their directors as much as we do. But they were told that when we reviewed Mike's salary we try to keep it within the 50th to 60th percentiles of airport executives across the country with airports our size and that's what we have done. It's always there so the fact that they find six that are less well you know if there is 100 there is 50 that get paid more than Mike because we are in the 50 - 60th percentile of that.
Mike Gobb's salary has more than doubled to just under $220,000 in ten years. Is such an increase justified?
The answer from my perspective is yes and I will so state that that's the answer from board's perspective. It's been a unanimous decision each time as to how much of a raise to give Mike and what he deserves. We go through a very sophisticated evaluation process, then the board as a whole discusses and recommends and agrees upon the percentage of increase. Early on, the growth was because of Mike's tirelessness in bringing this community together and getting the runway renovations done, which was part of bringing the community together and facing other obstacles that we've had. Regrettably for Mike's part and actually for the present board's part, these have been some tough times the last five or six years trying to bring this community together and deal with what has happened.
Taking into account the time frame sited by this article - "more than $200,000 on trips and other expenses from January 2006 through March 2008," an important event, one that might account for some if not many of these expenses is not mentioned, and that of course would be the crash of Comair Flight 5191 on August 27, 2006. What proportion of Mr. Gobb's travel during the remainder of '06 and then continuing on into '07 and '08 has been related to that crash?
I can't give you a tangible or precise answer of 20 percent or 70 percent or whatever and frankly I'm a bit hesitant to talk about that because the flight and tragedy of 5191 was exactly that, a tragedy that affected this entire community. The effect on the community and then the effect on the airport of course pales in comparison of the affect on the families that were involved. So I've always been very hesitant to talk about that but after the tragedy we were advised that the use of this airport would decline between the 25 and 30 percent for a period of time. We were also advised of the extraordinary amount of time that it was going to take the Directors and the Board members to deal with the issues that it was confronting. And they were right about the amount of time that was taking. But the experts were wrong about the about of loss that this airport would suffer and then I think they were wrong because of the efforts we put into educating the public as to what we provided and that the causes of that horrible tragedy were not related to anything that occurred at Bluegrass Airport. Certainly many of the trips referred to in the article involved Mike speaking at these national and regional conventions about the burdens and what happens when an airport faces a tragedy such as that. We're also pleased that these happened very infrequently in this country and so no one is really prepared for it because no one has gone through it before. You have to look at and seize the knowledge from those who've gone through it to prepare yourself for that. So one of the trips referred to (in the article), where he stayed at this great hotel in Henderson, Nevada outside of Las Vegas was a conference where actually Mike was speaking with Debra Hersman, the NTSB investigator who was here. Who frankly, if you remember Tom, sang the praises of this airport and the personnel there? He was at a national conference at this very expensive hotel with a member of NTSB trying to educate other airport executives and airport personnel as to what they can expect if something like this happened and more particularly ways that they might be able to deal with it. So you know it irks me a bit and people are going to go on about Mike's salary and perks, but I venture to say there are very few individuals out there who have worked the kind of hours Mike Gobb has had to work since the tragedy of 5191. ...there were multiple trips necessitated by our response to the tragedy. There were trips that Mike had to make to Washington to testify before the NTSB, to accompany Public Safety Officers in accepting National Awards.
The article compares the director's and travel and training expenses of Blue Grass Airport with those of airports in Moline, Ill., Cave Springs, Ark., Cedar Rapids, Iowa and Madison, Wisconsin as well as nearby Louisville and Cincinnati. Fair?
... I don't believe that any of those airports have two international airports within 70 miles of them. You have two of the top twenty metropolitan areas in the United States with international airports and you have Lexington 70 miles from each one of them. We have to market, we have to assert ourselves, we have to be known if we are going to provide the kind of services that we provide the citizens of this community and more particularly the citizens of Central Kentucky. Our passenger base comes from 54 counties. People of Lexington like to think all the business is theirs, however they only account for about one-third of our enplanements, another third (comes from) contiguous counties and then the final third comes from the non-contiguous counties as far south as Somerset, as far east as Ashland and so on.
Is it unusual for conferences such as those attended by Mr. Gobb to be held in major hotels?
To handle the number of people that come you have to have a large facility. I mean even here in Lexington we have our convention center connected to the Hyatt and to the downtown Lexington hotel - probably the most expensive properties in town. For the facilities that have the conference rooms and meetings rooms and so on that you need, they are there, and you can't change that. And they are in cities that you can get direct flights to. In large cities, by and large, although Henderson, Nevada is not necessarily a large city, but we don't choose where the conferences are, Mike doesn't choose where the conferences are. Those are set up by the organizations. It's always national and international organizations that sponsor these conferences. To give you an example, the one they (the Herald Leader) went after the most was the St Petersburg, Russia conference where Mike was a speaker and what he talked about was the cargo security system that we have in place here in Lexington, Kentucky which was an experimental system, the first in this country which provides our citizens, the fastest entry to the security line anywhere.
... And that's just some of the innovations that we have been able to have in this airport that puts us on the cutting edge in many respects. Mike's asked to speak about a lot of that and those innovations are brought to this community because Bluegrass Airport is known in the industry because we spend our time marketing ourselves.
In your view is Mr. Gobb's salary package in balance with airport revenues?
One of the consultants to this airport has told me on at least three occasions, that he does consultant work for 20 airports and not one has a budget surplus like we have. He knows of no airport that could survive one year on it's surplus and we can. So to suggest that we aren't good stewards of our money and that we don't spend it wisely is just wrong. And she knew about that. We're in the black by lots of money. We've never been not in the black.
What recent developments can be directly attributed to Mr. Gobbs' performance?
We just announced awarding a contract to a new FBO, a fixed base operator, who is going to put $11,500,00 into its facility out there. At the same time that most construction companies are talking about having to lay off people because there is no money, there is no work to be done. We can expand like that because we have decided to energetically market this community and the facilities that we have and we think it has paid great dividends for the community.
Final thoughts?
The story for Lexington Airport is, have we gotten results for our money? And the proof is in the pudding, as they say. We've come through some very trying times. We have a unified community. We'll have by 2010 a completely renovated facility with two renovated runways. Something that very few airports in this country have been able to do because there is no money there and that's being in competition with two much larger airports and two much larger metropolitan areas 70 miles apart. And so we have made great efforts to be where we are and we're proud of it and it's too bad our newspaper isn't proud of that fact.