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CIA Compensation Reform:
Independent Panel

In late 2003, then-CIA Executive Director A. B. “Buzzy” Krongard, former chairman and CEO of Alex Brown, Inc., came to BENS seeking an independent assessment of a far-reaching compensation reform proposal that would, among other changes, replace grade levels with pay bands for salary determinations, establish “pay for performance” bonuses, and make managers at the intelligence agency more accountable for developing and rewarding their employees.

Performance-based compensation systems and the sorts of evaluation and mentoring programs that are part of their implementation are routine parts of successful businesses. BENS members have had extensive experience in their own companies with “best practice” private-sector pay systems, and many have had experience with the difficulties of implementing new compensation programs. Coupled with the CIA’s prior positive experience with BENS’ evaluation of the In-Q-Tel program, selecting BENS to conduct this review seemed a natural fit.

BENS assembled an A-list assessment panel, headed by BENS board member Paul Stern, Chairman of Claris Capital. The BENS panel interviewed numerous CIA employees at every level and many other experts, including Defense Department leaders who were implementing a similar reform effort in the Pentagon. The subsequent report provided an unvarnished critique of the CIA’s program: the Panel found it representative of the best of industry practices but also judged that it required significant additional training for managers and workers alike and would benefit from a delayed and carefully phased implementation program.

Paul Stern testified to the worthiness of the CIA’s effort and to BENS’ suggested changes in implementation plans before the House Permanent Select Committee on Intelligence on March 25, 2004.