Joshi’s $560K severance a sign of an expensive decision

Hey there, time traveller!
This article was published 29/06/2016 (3417 days ago), so information in it may no longer be current.

What exactly did Deepak Joshi do to lose the trust of the mayor and council?

We may never know. From the moment Joshi was suspended in January 2015 to his forced resignation a month later, little specific information has been revealed about the underlying reasons. In fact, it wasn’t until this week that we got our first clear sign of what happened to Joshi when it was revealed he received $567,339 in wages and severance benefits from the city in the year he stepped down.

It’s hard to put an enormous number like that into context, but let’s try.

First off, at the time of his departure, Joshi was the highest paid bureaucrat at the city with an annual salary of about $245,000. People who make that kind of money generally see fairly large severance settlements when they leave.

However, what he was paid to leave and when he left is fairly indisputable evidence that Mayor Brian Bowman, the man who suspended Joshi and ultimately forced him to resign, and council are guilty of some rash and risky decisions. Rash enough that the city has been forced to dig into its pockets to pay out what appears to be the biggest severance award ever.

How can we conclude all that just from a simple number?

Consider these additional facts. Using the terms of similar contracts as a guide — including that of current CAO Doug McNeil, who recently made his contract public — Joshi was likely eligible for a severance payment equal to one year’s salary if he was fired without cause. That would be on top of any salary he earned in the fiscal year in which he was terminated.

Other recent severance settlements confirm this as a reasonable basis on which to analyze Joshi’s payout. Former CAO Phil Sheegl, for example, received a $250,000 severance payment, booked in 2014, the year after he resigned. However, it’s not just the resignation that determines the total payouts; it’s the time of year the resignations took place.

For example, Sheegl resigned in October 2013, late in the fiscal year. Joshi was suspended from his post in January 2015, and agreed to resign in mid February. That means Joshi earned only $33,550 of his $245,000 annual salary. Add them together, and you have a base severance amount of $278,550 dollars, or less than one half of what he was ultimately paid.

Somehow, some way, Joshi became eligible for an additional severance payout of nearly $290,000. Which brings us back to Bowman and council.

Bowman had only been on the job for four months when he suspended Joshi, and strongly insinuated that his CAO had committed some sort of error of omission or commission. “All I can tell you is that as of today, I’ve lost confidence (in Joshi) and exercised my power accordingly.” With that comment, Bowman was not just throwing Joshi under the city bus, he was also ensuring that Joshi was going to get a big payday.

Why would Bowman do that? The rookie mayor was up to his eyes in controversy at that early stage in his political career, and he wasn’t handling it all that well.

Bowman had entered into a risky public relations war with True North owner Mark Chipman, essentially accusing the owner of the Winnipeg Jets of using his gravitas and connections to get the inside track on an option from CentreVenture, the city’s downtown development agency, for a piece of city-owned land on Carlton Street.

While that mess was unfolding, the city was also reeling from revelations that the RCMP had opened an investigation into various aspects of the construction of the new police headquarters on Graham Avenue. Although Bowman never confirmed it, there were rumours that Joshi ran into trouble by either refusing or failing to keep the mayor properly informed of all the details of these and other potential scandals. That theory received a tremendous boost in credibility when Bowman elected to suspend Joshi from his duties, a very public denunciation of the performance of his CAO.

However, if Joshi deserved the suspension and the forced resignation, then he wouldn’t be eligible for a record severance award. He would only receive that kind of golden handshake if he was the victim of a rash and unjustified action on the mayor’s part. Given that the mayor continues to refuse to make any meaningful comment on Joshi and the decision to force him out of his job, that is really the only reasonable conclusion.

It should be noted that Bowman’s office issued a statement on Wednesday indicating that both he and council were prevented from commenting any further on the Joshi situation because of legal concerns. When you consider the order of events that led up to Joshi’s resignation, that is a pretty ridiculous claim.

If Joshi had been forced out for cause, then it would make sense for the city to make no comment. However, in this instance, it appears that Bowman and council did wrong by Joshi. If that is the case, then the mayor should admit that he made a mistake and that it cost taxpayers hundreds of thousands of dollars in additional severance.

Everyone makes mistakes, even mayors. But making a mistake isn’t the big issue here. It’s continuing to refuse to admit that a mistake was made.

That refusal makes this mistake an expensive mistake indeed.

dan.lett@freepress.mb.ca