Port of Seattle CEO Tay Yoshitani’s sideline gig as a director of Expeditors International isn’t unique among North American port executives. But it’s close.
Among nearly a dozen ports surveyed by The Seattle Times, only one has a top executive sitting on the board of a for-profit company. And none of the ports has written an individual employment agreement that specifically allows its executive to serve on the board of an outside business, as Seattle has.
The survey also confirmed what has been widely believed: Yoshitani, 66, makes more money than just about any other port executive in the nation. His annual salary of nearly $367,000 has fed criticism of the Expeditors board position he was appointed to last month, which pays more than $230,000 a year in cash and stock.
In Tacoma, the port doesn’t allow its chief executive to accept outside employment without special permission of the Port of Tacoma Commission. Port of Tacoma CEO John Wolfe holds no outside positions other than civic volunteer positions.
Wolfe’s salary was raised this week by $20,000 to $240,000 yearly. Wolfe had told commissioners last year he didn’t want them to award him a salary increase until the port’s finances were in better shape. During the last year, Wolfe and his team have completed a major strategic planning effort and attracted the Grand Alliance, a shipping consortium, from the Port of Seattle. The new Grand Alliance business is expected to add 25 percent to the Port of Tacoma’s container volume.
The Port of Seattle plays a fairly minor role in Expeditors’ worldwide business, say securities analysts who closely follow the global logistics and freight-forwarding company. The company mainly deals with cargo shippers, airlines and shipping lines, they say, not ports.
Expeditors doesn’t own any planes or ships. Rather, it buys cargo space in bulk from airlines and steamship lines and resells it to customers for less than they could negotiate for themselves. It also helps shipments clear customs, warehouses cargo, and provides related services.
“I don’t see how he would be compromised by being on the board of Expeditors,” said David Ross, an analyst with Stifel Nicolaus in Baltimore. “If anything, he might learn something from Expeditors that could make the Port of Seattle operate more effectively.”
The port’s in-house counsel reviewed the matter before Yoshitani’s appointment to Expeditors’ board and found no actual or potential conflict of interest. Yoshitani, in an interview Wednesday with KING-TV, insisted there is nothing wrong with his Expeditors role. “I looked into it fully. I felt there is no conflict. I still believe it,” he said. “I stand by my integrity.”
Nonetheless, the appointment has generated negative public comment and opposition from lawmakers, organized labor and advocacy groups, many of whom have been at odds with the port in the past on other issues.
On Thursday, the liberal group Fuse Washington said it had mobilized 1,800 people to write to the Port Commission to demand further review of Yoshitani’s arrangement with Expeditors.
A day earlier, House Speaker Frank Chopp, D-Seattle, said the commission should review the situation in a public meeting, “in order to assure the public that no conflict of interest exists.” The commission plans to discuss the matter in open session next Tuesday.
Among the ports surveyed by The Times, the only top executive to have a similar relationship with a private business is Geraldine Knatz, executive director of the Port of Los Angeles – the nation’s busiest seaport.
Knatz, who makes $317,731 a year at the port, became a director of Bank of the West in April 2010.
Phillip Sanfield, a spokesman for the Port of Los Angeles, said the city’s Ethics Commission approved Knatz’s appointment in advance, certifying that the bank did no business with the port and that there was no actual or potential conflict of interest.
The bank would not disclose what, if any, compensation Knatz receives as a director.
No port executives surveyed, including Knatz, had a provision in their employment agreement specifically allowing them to serve on the board of a for-profit company, as Yoshitani’s contract does.
To some extent, Yoshitani’s salary reflects the disparate demands of his job. The Port of Seattle encompasses not only the nation’s sixth-busiest seaport (according to data from the American Association of Port Authorities) but its 17th-busiest airport.
But Patrick Foye makes less than $290,000 as head of the Port Authority of New York and New Jersey, which oversees five seaports, four bridges, three major airports, two tunnels and a commuter rail line.The News Tribune’s John Gillie contributed to this report.