Want a bailout of the arts? Don't make the ask in an Armani suit
When the big three automotive CEOs flew separate private jets to Washington, DC to plead for public funds, I remember thinking to myself that I was thankful that I was a publicist and marketing director for a non-profit arts organization. The type of arrogance it takes to fly corporate jets to ask for billions of dollars in public aid surely could only be found in the private sector.
However, recently there has been a dust up about executive compensation in the non-profit arts sector, particularly because as the economy tightens, more and more arts organizations are pleading their case with stakeholders, some going as far as Mr. Kaiser in asking for a government bailout of the arts. Although I have tremendous respect for Mr. Kaiser, I am convinced that perhaps he isn't the best emissary for the non-profit arts--how does it look for a non-profit arts administrator who makes more than $1 million a year in salary to be the champion of the suffering arts scene?
Two separate stories have broken in the last month questioning the salaries of non-profit arts administrators. The most recent reported that Joe Dowling, Director of the Guthrie Theater in Minneapolis, made $682,229 last year, which represents 2.6% of the organization's $27 million budget. When compared with similar sized and larger organizations, Mr. Dowling's compensation seems high. Todd Haimes, who leads New York City's Roundabout Theatre which is twice the size of the Guthrie, makes $487,439 per year (and the dollar doesn't stretch in New York like it does in Minnesota). Similarly, Andre Bishop, the Artistic Director of Lincoln Center Theater which is 25 percent larger than the Guthrie, makes $428,183. So why is Mr. Dowling's compensation not in scale with his peers, or even peers at larger organizations? The second recent story takes a look at proposed legislation in San Francisco which is trying to limit non-profit executive compensation to a maximum of six times the salary of the lowest paid employee.
Executive compensation isn't a new concern. In the past couple of years, we have had several large controversies over this issue, including the infamous Lawrence Small, previous Secretary of the Smithsonian, and Josiah Spalding, Jr., CEO of the Citi Performing Arts Center. Mr. Small left the Smithsonian under a lot of pressure and controversy surrounding his lavish spending habits, which included a $15,000 receipt for the replacement of French doors at his home and spent $48,000 for two chairs, a conference table and upholstery for his office suite. In Mr. Spalding's case, he was awarded a $1.265 million bonus in 2006 even though he presided over five straight years of budget deficits, cuts to programming, and a dramatic drop in performances at the Wang and Shubert theaters, which the Citi Center operates.
Over the past year, I have read numerous articles about the woeful state of symphony orchestras, which are trying to remain competitive with downloads of classical music and are struggling to develop sustainable business models. Just in the past couple of months, the Santa Clairta Symphony, Pasadena Symphony, Kansas City Symphony, Las Vegas Philharmonic, the Virginia Symphony, the Detroit Symphony, and the Cleveland Orchestra have reported major financial problems. But when you look at the top 10 salaries for Music Directors in the United States, one would conclude that symphonies are flush with cash. The conductor of the cash strapped Cleveland Orchestra is seventh on the list of the top 10 and makes $1.2 million a year. The lowest on the top 10 list is Osmo Vanska of the Minnesota Orchestra who makes $713,518 and the highest on the top 10 list is Lorin Maazel of the New York Philharmonic who makes $2.189 million.
On the flip side of the argument, there are CEOs in the private sector who are so linked to the success of their company that even rumors of their illness cause stock devaluation. Over the past several months, it has been rumored that Steve Jobs, the CEO of Apple, has a terminal illness, and these reports have caused Apple's stock to fall. The tie between Steve Jobs and the success of Apple is so strong that it lead to Mr. Jobs holding a press conference where he released an update on his health, stating that "reports of his death are greatly exaggerated." After this announcement, share prices for Apple jumped four percent. When the success of the organization is tied so directly to the CEO, it might be entirely appropriate to compensate them at such a high level.
Either way, this argument over executive compensation reminds me of something a professor said to me when in graduate school--"when making an ask for money or pitching a sponsorship, never arrive at a meeting with the prospect dressed in an Armani suit or a Walmart suit--either way you are screwed." I have to think that in some cases the arts are arriving at these meetings in an Armani suit.
However, recently there has been a dust up about executive compensation in the non-profit arts sector, particularly because as the economy tightens, more and more arts organizations are pleading their case with stakeholders, some going as far as Mr. Kaiser in asking for a government bailout of the arts. Although I have tremendous respect for Mr. Kaiser, I am convinced that perhaps he isn't the best emissary for the non-profit arts--how does it look for a non-profit arts administrator who makes more than $1 million a year in salary to be the champion of the suffering arts scene?
Two separate stories have broken in the last month questioning the salaries of non-profit arts administrators. The most recent reported that Joe Dowling, Director of the Guthrie Theater in Minneapolis, made $682,229 last year, which represents 2.6% of the organization's $27 million budget. When compared with similar sized and larger organizations, Mr. Dowling's compensation seems high. Todd Haimes, who leads New York City's Roundabout Theatre which is twice the size of the Guthrie, makes $487,439 per year (and the dollar doesn't stretch in New York like it does in Minnesota). Similarly, Andre Bishop, the Artistic Director of Lincoln Center Theater which is 25 percent larger than the Guthrie, makes $428,183. So why is Mr. Dowling's compensation not in scale with his peers, or even peers at larger organizations? The second recent story takes a look at proposed legislation in San Francisco which is trying to limit non-profit executive compensation to a maximum of six times the salary of the lowest paid employee.
Executive compensation isn't a new concern. In the past couple of years, we have had several large controversies over this issue, including the infamous Lawrence Small, previous Secretary of the Smithsonian, and Josiah Spalding, Jr., CEO of the Citi Performing Arts Center. Mr. Small left the Smithsonian under a lot of pressure and controversy surrounding his lavish spending habits, which included a $15,000 receipt for the replacement of French doors at his home and spent $48,000 for two chairs, a conference table and upholstery for his office suite. In Mr. Spalding's case, he was awarded a $1.265 million bonus in 2006 even though he presided over five straight years of budget deficits, cuts to programming, and a dramatic drop in performances at the Wang and Shubert theaters, which the Citi Center operates.
Over the past year, I have read numerous articles about the woeful state of symphony orchestras, which are trying to remain competitive with downloads of classical music and are struggling to develop sustainable business models. Just in the past couple of months, the Santa Clairta Symphony, Pasadena Symphony, Kansas City Symphony, Las Vegas Philharmonic, the Virginia Symphony, the Detroit Symphony, and the Cleveland Orchestra have reported major financial problems. But when you look at the top 10 salaries for Music Directors in the United States, one would conclude that symphonies are flush with cash. The conductor of the cash strapped Cleveland Orchestra is seventh on the list of the top 10 and makes $1.2 million a year. The lowest on the top 10 list is Osmo Vanska of the Minnesota Orchestra who makes $713,518 and the highest on the top 10 list is Lorin Maazel of the New York Philharmonic who makes $2.189 million.
On the flip side of the argument, there are CEOs in the private sector who are so linked to the success of their company that even rumors of their illness cause stock devaluation. Over the past several months, it has been rumored that Steve Jobs, the CEO of Apple, has a terminal illness, and these reports have caused Apple's stock to fall. The tie between Steve Jobs and the success of Apple is so strong that it lead to Mr. Jobs holding a press conference where he released an update on his health, stating that "reports of his death are greatly exaggerated." After this announcement, share prices for Apple jumped four percent. When the success of the organization is tied so directly to the CEO, it might be entirely appropriate to compensate them at such a high level.
Either way, this argument over executive compensation reminds me of something a professor said to me when in graduate school--"when making an ask for money or pitching a sponsorship, never arrive at a meeting with the prospect dressed in an Armani suit or a Walmart suit--either way you are screwed." I have to think that in some cases the arts are arriving at these meetings in an Armani suit.
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