The issue of executive compensation is one which draws a wide range of opinion from those inside and outside the business. The subject has been of particular interest here at Adaptistration simply because using compensation figures is a common method used to evaluate a manager’s value and effectiveness.
In last year’s ICSOM Executive Director report I predicted that even though orchestras, on average, continue to run up significant deficits while simultaneously compromising artistic programming, executive managers would continue to see large increases in compensation. This brings to the forefront the question of whether or not the business is, in fact, compensating effort over achievement.
Following last year’s compensation reports it’s time to revisit the numbers to see what’s changed…
Where The Numbers Come From
The following “executive director (also called president and/or CEO) compensation” and “total ensemble expenditures” figures were obtained from the respective orchestra’s 2003 IRS Form 990.
The “musician base salary” figures were obtained from records collected by the AFM and IGSOBM (Seattle) for the 2002-2003 concert season (which corresponds with the 2003 IRS Form 990).
The executive director compensation figures include the combined amounts reported as what the IRS classifies as “compensation” and “contributions to employee benefit plans & deferred compensation”. However, each orchestra does not always report figures for the latter category
The musician base salary figures collected by the AFM are done so on an annual basis and reported in a booklet entitled Wage Scales & Conditions in the Symphony Orchestra. Additional updates were obtained from ICSOM Settlement Bulletins, prepared by each respective orchestra’s negotiation committee and published at the ICSOM website.
Adaptistration makes no claim to the accuracy of information from documents compiled by external sources.
What The Numbers Don’t Show
It’s important to remember that the numbers shown do not always tell the entire story. For example, an executive director may have had a large increase in salary because they were leaving a position (either on their own volition or not) and per terms of their contract they may have received a sizeable severance or deferred compensation package. As such, the cumulative compensation may artificially inflate their annual earnings.
These figures may not reflect bonuses or other incentive payments, therefore underreporting what executives may earn. Also missing from the figures are expense accounts and other perks, which are rarely reported on the IRS Form 990’s. As such, the cumulative compensation for executive directors may or may not be more than what is listed.
These figures do not always represent reductions or concessions accepted by musicians in the middle of a contract. For example, in the 2002-2003 season, the musicians of the Baltimore Symphony were originally slated to earn a base salary of $74,100, but in reality they accepted a $1,200 reduction in pay to $72,900 via a mid contract negotiation concession.
These figures do not include any of the opera or ballet organizations which are members of ICSOM or IGSOBM.
How Things Compare To Last Year
- According to these figures, the average executive director for an ICSOM ensemble earns 366.11% more than a base salary musician, which is a 5.14% increase over last year’s figure of 348.18%.
- Compared to the figures from 2002, the average executive director compensation increased 10.61% as compared to the average ICSOM base musician salary increase of 3.83%.
Who Earns The Most?
Three individuals top the executive director compensation pile with only a 3% difference between their overall compensation (yet they still earn just over 50% more than the manager in the #4 position):
- Cleveland Orchestra’s Thomas Morris earned $767,682
- New York Philharmonic’s Zarin Mehta earned $750,000
- Los Angeles Philharmonic’s Deborah Borda earned $745,163
Who Gained The Most?
Although they may not earn as much as the executive directors on the top of the list, these managers enjoyed more than double the average increase in compensation:
- Utah Symphony & Opera’s Anne Ewers benefits from a staggering 77.27% increase
- Nashville Symphony’s Alan Valentine received a 50% increase
- Atlanta Symphony’s Allison Vulgamore received a 41.98% increase
- Charlotte Symphony’s Richard Early received a 27.96% increase
- Boston Symphony’s Mark Volpe received a 24.63% increase
- Syracuse Symphony’s Jeffrey Comanici received a 24.53% increase
- New Jersey Symphony’s Lawrence Tamburri received a 22.27% increase
- San Francisco Symphony’s Brent Assink received a 21.32% increase
The discussions surrounding whether or not an executive director should be paid sums in excess of 300% more than their base musicians is based on a host of variables. Unfortunately, whether or not an executive is appropriately compensated is an issue which is too subjective at many organizations. That fact that the criteria used by many executive board members is ambiguous or based on what peer managers in the for profit industry earn doesn’t help the process.
Are good executives who exceed their goals and lead the way to create and maintain a healthy work environment (for artistic and non artistic employees) worth some of the large salaries listed above? Absolutely; few people seem to be in disagreement over that point.
Nevertheless, every organization would benefit from increased scrutiny regarding how the board determines to set executive compensation and why they use the criteria they do.
Looking at the numbers is only the first step; stakeholders would be best served if they required more details regarding executive compensation. That includes not only evaluation on part of the board members but also significant input the administrative staff, musicians, volunteers, and patrons. Asking whether or not an executive is worth any increase in compensation isn’t a question which should raise defenses. Instead, it should be a normal part of a regular process used to evaluate an executive manager’s genuine value. Allowing outside examination removes the temptation for board members to reward mere hard work over concrete accomplishment.
For the orchestras in this portion of the review, it appears that the numbers indicate that board members tend to believe their executive directors deserved their collective increase in compensation. So much so that they increases in their collective compensation over the national rate of inflation by more than three times whereas musician made only ..83% over the rate of inflation.
What do you think the executive director in your respective orchestra deserves and why? It will be interesting to see if there’s any difference of opinion between those in and out of the business.
In order to head off many of the emails I would otherwise expect to receive, yes I realize that all but three of the orchestras listed above show an increase in the amount base musicians earn.
“So where are all of these big cuts we’ve been hearing orchestra musicians whine about?”
There are a few answers to that question. First, some of the base musician salaries listed above do reflect a reduction in planned increases through “reopeners” (when a collective bargaining agreement is opened up for negotiation before its scheduled end).
Next, you have to remember that the numbers above reflect what happened during the 2003-2004 season, whereas most of the big reductions you’ve been reading about happened during the 2004-2005 season. Those figures will appear in next year’s compensation report (once all the IRS Form 990’s are available).
However, a few orchestras have already submitted their IRS Form 990 and are ready for review so some comparisons can already be made. I won’t spoil some of the surprises but in one organization the musicians accepted a 19% cut in base salary while the executive director accepted a 30% increase in compensation. In another orchestra, the executive director accepted a 4% reduction in compensation while the musicians accepted a 4.5% increase in base musician salary.