MILLERSVILLE, MD — The Maryland Environmental Service was formed by statute in 1970 as an independent agency of the State of Maryland. After formation, MES has operated 100% as a not-for-profit business unit of the state. We are a fee for service entity, as such, if we do not successfully achieve our mission, we do not get paid, MES is appropriated no direct tax funds. Our team performs essential environmental capital projects and operations throughout the region. In FY20, approximately 80% of our revenue passed through to the private sector (unaudited, annual financial audit underway). Our leadership, in good times and bad, faces the daily responsibility of guiding the MES team to success to ensure that we are not faced with reductions in personnel.
Severance packages are customary for both MES Directors and Acting Directors and is a long-established practice. Again, unlike other state agencies, MES receives no direct appropriations from the state as it operates in a manner equivalent to a private sector organization. As such, it has a private sector like pay structure.
In May, the MES Board of Directors unanimously approved a severance payment to its former Director/CEO Roy McGrath. Mr. McGrath, naturally, recused himself from both the discussion and the vote. Several senior executives who departed in recent years also received severance packages upon their departure including the prior MES Director/CEO Jim Harkins, who was paid $256,746 in 2016.
Under Mr. McGrath’s leadership, MES grew consistently, with FY20 being the highest in the organization’s 50-year history, reaching $178.7 million in revenue. Earlier in the year, at Mr. McGrath’s request, MES made a record bonus payout to its employees through an annual incentive program. Mr. McGrath also increased opportunities for training and education for all employees and launched a diversity, equity, and inclusion program during his tenure.
While the full severance payment to Mr. McGrath was not contractually required, it was offered as a well-earned compensation package for having led the organization to its best financial and operational year in our history. MES competes for personnel not with other state agencies so much as with many companies in the private sector that pay considerably more. There is significant precedent within other independent state agencies, as well as within higher education and other institutions, for such well-deserved payments.
“MES is grateful for the tremendous leadership provided by Mr. McGrath and wishes to reiterate that we view this payment as compensation for exceptional growth during his tenure,” said MES Director Charles Glass. “MES remains a valued institution and will continue to grow, serve the citizens, and promote environmental protection. We welcome a full review of our policies, procedures, and operations, and we look forward to working with all stakeholders to reaffirm that we are open and transparent in every manner,” said Glass