2005 Compensation Report: ROPA Executive Directors

Continuing with this year’s compensation reports, we move on to examine the executive director compensation at 33 ROPA & IGSOBM symphonic ensembles with annual budgets over $1 million. Following last year’s report, we discovered that the discrepancy between executive and musician base salaries was considerably larger than their counterparts in ICSOM ensembles.

Let’s see what the numbers tell us for this year…

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 (Tucson) 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 for ROPA ensembles are done so on an annual basis and reported in a booklet entitled Wage Scales & Conditions in the Symphony Orchestra. However, the majority of “Musician Base Salary” figures are not salary figures at all since only nine of the ensembles pay a fixed salary to a portion of their musicians. The remaining musicians are all paid on a sliding “per service” scale.

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.

Unlike their peers in ICSOM ensembles who all earn no less than the “Musician Base Salary” (with a few exceptions), all ROPA ensembles use a tiered system of salary and/or per service payments. For example, although the Toledo Symphony may list a base musician salary of $23,081, only 43 out of 73 musicians are covered by the salary figure. The remaining 30 players are paid using the sliding per service tier system.

In the all per service ensembles, the figures listed in the “Musician Base Salary” are actually the average annual income earned by section string players (or section wind players if no information for the string players was available). This figure is reported by the AFM because it best represents the annual earnings for the musicians who usually perform the greatest number of services in any per service orchestra; string musicians.

These figures do not include any of the opera or ballet organizations which are members of ROPA or IGSOBM.

Top Men

How Things Compare To Last Year

  • According to these figures, the average executive director for a ROPA ensemble earns 717% more than a base salary musician, which is a 7.79% increase over last year’s figure of 644%.
  • Compared to the figures from 2002, the average executive director compensation increased 8.62% as compared to the average ROPA base musician salary increase of 7.34%.

Who Earns The Most?

Ten executive directors earn over $100,000 in annual compensation:

  1. Toledo Symphony’s Robert Bell earned $179,313
  2. Rhode Island Philharmonic’s David Wax earned $161,690
  3. Pacific Symphony’s John Forsyte earned $155,452
  4. Grand Rapids Symphony’s William Ryberg earned $145,648
  5. Fort Wayne Philharmonic’s Christopher Gueri earned $128,388
  6. Austin Symphony’s Jim Reagan earned $128,167
  7. Omaha Symphony’s Robert Hallam earned $119,453
  8. Dayton Philharmonic’s Curtis Long earned $111,656
  9. Wichita Symphony’s Mitchell Berman earned $110,300
  10. Hartford Symphony’s Charles Owens earned $102,652

Who Gained The Most?

These managers enjoyed increases nearly three times and more the average increase in executive compensation (Richmond is excluded due to their ED serving only in an interim capacity and the previous ED only served for a partial season):

  1. Erie Philharmonic’s Eric Borenstein received a 42.46% increase
  2. Toledo Symphony’s Robert Bell received a 36.93% increase
  3. California Symphony’s Stacey Street received a 24.945 increase
  4. Elgin Symphony’s Michael Pastreich received a 23.57% increase

Conclusions

The debate surrounding whether or not ROPA ensemble executive directors should be earning in excess of 700% more than the average musicians in their orchestra is one which stirs up intense emotions among musicians and managers alike. Although it was good to see both groups make gains above the national rate of inflation, more than half of these organizations pay their average musicians less than the U.S. poverty threshold for a family of one. Only seven ensembles pay their average musician enough to rise above the U.S. poverty threshold for a family of four.

One of the classic viewpoints among some executive managers in ROPA orchestras to explain the extreme disparity in pay scales is the issue of time. Remember, even in the few ROPA orchestras which do pay a salary for a portion of their musicians, the longest of those seasons is 42 weeks, which equates to something similar to the time frame a public school teacher is employment.

However, it is worth noting that the executive directors at the top of the earning list earn as much or more than their peers in the lower budget ICSOM ensembles. Some of those same ICSOM ensembles have comparable budgets yet manage to pay the majority of their musicians a salary as opposed to a per service scale. While other ICSOM ensembles have much larger budgets but don’t pay their managers as much, thus indicating they use a significantly different scale for measuring success.

For example, in Wichita their executive director earns more than their peers in three ICSOM ensembles. At the same time, the budget for Wichita is two to three times smaller than those same ensembles and none of the Wichita musicians are paid a salary. Other ROPA orchestras which maintain large discrepancies between how the much of their budgets are directed toward the musicians include California, Canton, Elgin, Dayton, New Mexico, and Rhode Island.

Another point worth keeping an eye on is the eleven ROPA ensembles which reported a decline in overall expenditures. Although some of the changes were negligible, there were a handful of cases where the changes between the executive’s compensation, the average musician’s salary, and the overall expenditures don’t parallel each other.

For example, in Mississippi Symphony their overall expenditures decreased by $132,240 in addition to the average musician earning $2,235 less; however, the executive director received a $4,500 increase.

Why do such large discrepancies between executive directors and musicians exist at all? I had a conversation not long ago with one executive director from an ensemble whose average musician salary is lower than the U.S. poverty threshold who said “I don’t hear the musicians in my orchestra complain about my salary.” Why then should they have a guilty conscious?

The answer falls in the neighborhood of whether or not the musicians make a deliberate effort to review their executive director’s performance. Do they track institutional goals? Are musicians allowed regular representation on all board and administrative committees where they can take notes, receive copies of any SG&A based handouts, and request additional information as needed? If so, then they are in a fair position to offer relevant input to the executive board members regarding whether or not the executive director deserves a change in compensation.

Furthermore, the level of participation among board members in ROPA ensembles varies greatly. Some may take a high level of interest whereas others spend a minimal amount of time on executive review duties. How much time and effort do boards spend auditing institutional information (beyond the typical benign financial audit performed every year or so)?

At the top of this hierarchical pattern you’ll find the definitive question; “Is this the best way for ROPA ensembles to operate?”

Foreshadowing

Since 80% of these same organizations have already filed their 2004 IRS Form 990, the heading “foreshadowing” isn’t quite accurate. Nevertheless, the remaining 20% are the largest budget organizations so any significant changes in how they functioned can change the averages considerably.

One noticeable event is in one of the smaller budget organizations; an executive director received a 45% increase in compensation while the musicians received a 6.62% cut in average compensation yet the overall expenditures saw an 11.5% increase.

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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17 thoughts on “2005 Compensation Report: ROPA Executive Directors

  1. Hello again, Drew. Obviously, you are entitled to your opinion that ROPA orchestra EDs are overpaid. As I do every year, I wish to state that I believe that your comparison is flawed, because you are understating musician compensation. In the Dayton Philharmonic on average a musician earns wages of a bit over $18,000. Musicians who are close to a “full-time,” seasonal service count make around $30,000. Only 5 musicians made less than the $8,900 figure you mentioned and four of these five have other full-time jobs.

    So, I think I earn my salary, and you think I don’t. I don’t really have any illusions that I am going to change your mind. I just wish you would give a more accurate accounting of what we are paying our musicians when you try to argue for your point.

  2. Earning one’s salary on the backs of the talent is disgraceful. I would not be so proud of my salary if I was one of these EDs. If there was no musician, there would not be a need for the management. Not the other way around.

  3. Curt brings up an interesting point. The obvious question then is why do Curt’s figures differ from the annual average string player’s income reported by the AFM?

    The numbers presented by the AFM are prepared by Dayton Philharmonic musicians so there obviously must be a discrepancy between what Curt reports and what the Dayton Philharmonic musicians report. It’s that discrepancy and the reasons behind why it exists which is worth further examination. It also points to another good reason why everyone would benefit from increased institutional transparency.

    As the author of the compensation reports, I can guarentee that they aren’t directed toward any individual ROPA executive director or musician; rather, they are designed to demonstrate the positive impact of a more clearly defined executive evaluation process which includes additional input from outside constituency groups such as the musicians, lower level managers, staffers, and patrons.

  4. Good points, Drew. I’m not sure why the discrepancy, and I hope that someday we can reach a point where musicians and management come up with a common way of tracking and reporting financial data. It seems like a lot of time is spent in every negotiations arguing about what the numbers are.

    I hope I’m not coming off as overly defensive. I just think your data/and or how you choose to use it is flawed. I agree with you that greater transparency would be very healthy for orchestras.

  5. Drew McManus has written a fair and balanced article. It would be helpful for Executive Directors and board members to remember that they are there to serve the musicians, who in turn are able to provide a quality product for the community. Orchestra musicians are highly specialized professionals who have invested years of study and a lot of money to be able to do their jobs. Such a discrepancy in pay shows a fundamental lack of respect for the skills of musicians. The Dayton community should be ashamed that their orchestra’s Executive Director is so well compensated at the expense of the musicians.

  6. Thanks for this Drew. First time poster, but I discovered your blog a few months ago. Regarding Curt Long’s post, I believe one of the purposes of the article is to illustrate the unacceptable disparity between the salaries of musicians and executive directors of regional orchestras, especially when smaller communites are having a more difficult time funding their arts organizations. This is not to imply that executive directors don’t deserve to be well compensated – of course they do. But so do the musicians, especially when their presence enriches the lives of people living in these communities.

  7. I don’t have any illusions on changing anyone’s mind. I guess I would argue that it is in the musicians’ self interest to have an executive director who

    1. raises lots of money,
    2. oversees brilliant marketing efforts,
    3. makes sure that the operations side of the organization gives the musicians and music director an environment in which they can produce the best possible results,
    4. builds a board that understands the organization’s challenges and can make wise decisions about its future, and
    5. balances the artistic goals and priorities of the organization with business realities.

    If an orchestra can find such an executive director, the musicians are going to make more money and have a better job. An executive director who has all those attributes is an exectionally good value to the organization and its musicians at the highest salaries that are listed on Drew’s chart. An executive director who does a lousy job at those things is a terrible value at the lowest salary you have listed on the chart.

  8. I think curt has some very good points (although we could have some further discussion of point #5), all it’s missing is a component to include additional sources of input for the executive review process and we’re all set.

  9. It is certainly useful to look at the difference in salary versus administrative and artistic employees. It gives an interesting view into the face-value workings of an arts organization.

    That said, what gives a clearer representation is the percentage of total budget the salaries are amongst employees. For example, imagine an orchestra with a $3M budget (that is the expense number), who has an ED with a salary of $100K per annum, or 3% of the total budget. They also have an median musician salary of $10K, for, let’s just say 60 musicians (which I realize is probably a bit small, but play along for argument’s sake), resulting in a total salary compensation for musicians of $600K, or 20% of the overall budget. Now, while the ED is making significantly more than musicians individually, the organization’s commitment to each is telling, with a full 1/5 of its budget going strictly to musicians…a fairly solid commitment to the art.

    Why is this important? Because an arts organization’s main responsibility is to it’s community and to the art is provides that community, not, as some have implied, to it’s individual artists. Obviously, the organization needs to compensate those artists, and all other employees, fairly, in order to recruit and keep the best talent possible. But, in the end of the day, these organizations exist to provide arts and culture to the communities they exist it, and need to carve their budgets up accordingly. The musicians are in an unfortunate position because they, as a complete unit, make up a substantial portion of the organizations salary budget, which needs to be carved amongst all of them, and some more that others.

    Also, in response to the earlier post regarding making a living on the backs of musicians. It is certainly true that without the players, there’s no need for management. But, without the organization and the successful management of that organization, there would be no place that provided stable, predictable employment to those players, nor a relatively overt stage to display their considerable talents. It is a much more symbiotic relationship than many would like, ideally, to believe.

  10. David’s point of justifying compensation expenditures based on total percentage of the budget is one that many managers in the business tend to point out. I do have to completely disagree with David’s point that 1/5 of the total artistic expenditures is a fairly strong commitment to the art.

    For the 03-04 season the average percentage of the budget paid to musician in ROPA ensembles was only 30%, higher than David’s figure of 20% but still far too low. Orchestras are nonprofit entities, and as such, they need to be judged by how well of a job they do at distributing the service they perform; making music. Would you expect the American Cancer Society to spend 70-80% of every dollar donated on expenses that have nothing to do with actual cancer research or treatment? Would that constitute a strong commitment to cancer research?

    Having founded a nonprofit for the purpose of raising money for a medical cause, I know just how important it is to raise that percentage of every dollar raised going toward the primary mission (for the record, my charity had the highest return of every dollar to beneficiaries in the state of Maryland for each year it operated – over 90% each year – and that included the expenses related to operating chamber orchestra concerts! It can be done!).

    For example, if you look at some of the figures above a little closer you can see some real discrepancies which deserve explanations. In the California Symphony, if you assume they employ 100 musicians at the average salary then that accounts for $247,400, or 19.94 % of their overall budget (right around David’s figure). But their executive director’s compensation constitutes 7.06% of the entire budget, or 3,442% more than the average musician earns.

    Over the past several years the percentage of the average orchestra budget directed toward musicians as opposed to non artistic expenses has been changing, with more and more being directed toward the non artistic equation. Is this because it’s harder to operate in the current environment or is it because managers aren’t adapting to changes and improving operational efficiency (or is it a little of both)?

    In the end, an appropriate goal for dividing up a budget should direct at least half of overall expenditures toward musicians (how you classify those expenses is an entirely different discussion worth having at another time).

  11. Interesting comments David and Drew. I agree with both of you, to a degree.

    I think that an orchestra exists to bring programming to its community, and that a substantial portion of the organization’s budget should be going to programming (obviously this includes, but is not limited to the musicians).

    But maximizing the percentage going to musicians may not always be the right or the realistic goal, even from the musicians point of view (because 40% of $5 million is better than 60% of $2 million). As budgets go up, marketing and fundraising become less efficient (e.g., In Dayton, the first $500,000 in ticket sales may be cheap to generate, but the fifth $500,000 in ticket sales may be very expensive). Are the musicians better off if we only take get the “easy” income? Orchesta staffs have grown tremendously in the last thirty years; As far as I can tell, most of the growth has been in marketing and development jobs.

  12. It seems like we’re getting into some very speculative examples here. Of course the musicians would earn more from 40% of $5 million budget as opposed to 60% of $2 million. But if we’re tossing out hypothetical scenarios I would say the $2 million budget organization should go out and find better managers who won’t hold the organization back and get its budget up to $5 million while maintaining the 60% directed toward musician salaries figure. It all degrades into a circular discussion.

    However, there are two much more significant discussions which evolve from Curt’s latest comments:

    1) Orchestra staffs have grown tremendously in the past thirty years (almost exponentially in the past ten). However, have those increases resulted in proportionate gains or are they needed just to maintain status quo?

    2) Within the legal constraints of the nonprofit structure the executive board (many of who are guided directly by the beliefs of thier executive managers) have the final decision regarding what “does” and “does not” constitute mission oriented spending. For example, is it appropriate for an organization to direct such a significant portion of its artistic expenditures toward guest artists/conductors at the expense of limiting what they pay their musicians to no more than 25% of the overall expenditures?

    In the end, the musicians have no legal say in how those funds are directed other than through their contract negotiations, which are spent arguing about how much of the pie there is and how it should be divided.

    The questions patrons, big donors, and philanthropic foundations should be asking is why do two organizations with similar budgets direct significantly different amounts toward musician compensation: one with a $4.9 million budget directing 30% toward musician salaries and the other a $4.6 million budget directing 49% toward musician salaries?

    Another good question to ask is why should 50% of the budget be directed toward the musicians at all, is it just about paying them a living wage or is it much more than that? If so, what could those other issues be?

    I think each of those questions should spark a fascinating discussion and I hope patrons take the time to contact their local orchestra administrators, board members, and musicians looking for information and asking questions.

  13. One issue from Curt’s last note I forgot to address is the issue of “easy” income. I would hope that the stakeholders of any organization afflicted with managers who are satisfied with only hunting down easy money (a.k.a. being lazy) would do everything in their power to kick those individuals as far away from the outfit as possible.

  14. Executive compensation, chief exec pay in particular, is a valuable discussion for any corporate organization, especially those reliant upon community support for their very existence. As in the private sector, there seems to be two “disconnects”: 1) between CEO pay and performance, and 2) between pay for the CEO and all other employees.

    I do agree that comparing CEO pay to starting section player pay is a bit disingenuous, since the majority of players at most orchestras do better when principal and seniority pay is included, but accept that these are the best numbers currently available over multiple years.

    A complete picture would also include other administrative staff pay (as far as I can tell, line staff in most ICSOM and ROPA orchestras get paid comparable to other non-profit employees). Here, as with CEO pay, there seems to be little direct connection between performance and compensation. Many organzations would love to make this linkage, but how do you measure the marketer’s performance when the goal is often set as “the difference between what fundraising can dig up and a balanced budget,” no matter what market conditions suggest as realistic? (Or, from a development perspective, vice versa.)

    Of course, in Dr. Pangloss’ “best of all possible worlds,” marketing people (like me) and fundraisers wouldn’t have jobs at all. All concerts would sell out, at ticket prices sufficient to cover costs with a little extra, as a result of a few simple announcements in the local paper. If only my job description could realistically set my goals as to work myself out of a job!

    One minor question: Why is it that anyone who has ever watched a TV ad thinks they know how to do it, but few who’ve heard a good violinist thinks they could do better?

  15. I agree with Rob’s comments that the examination would more complete if we could figure VP and middle management compensation into the examination. Unfortunately, in all but the largest budget ensembles, those figures are not reported on their respective IRS Form 990. But it does bring up the closely related issue of institutional transparency.

    Should nonprofits (which include orchestras) release compensation figures?

    I believe one point in Rob’s comment that isn’t entirely accurate deserves some clarification regarding “…comparing CEO pay to starting section player pay is a bit disingenuous, since the majority of players at most orchestras do better when principal and seniority pay is included”.

    I hear that all the time from mangers but the truth of the matter is the vast majority of musicians do not earn principal pay. The difference between the average principal and concertmaster compensation is nearly 50%, so attempting to compare the average principal pay to what concertmaster’s earn isn’t a useful tool.

    The average seniority pay for all ICSOM musicians with 10 years seniority is 2.8% above base compensation. The average seniority pay for all ICSOM musicians with 20 years seniority is 5% above base compensation (these figures are tabulated annually by the AFM. The figures for ROPA ensembles are lower, but the AFM does not provide as detailed reports for those ensembles).

    So all of that seniority pay doesn’t begin to diminish the point of the comparison; it’s like trying to slow down a 747 by hurling a rock at it. You still end up with the remarkable differences between average compensation rates.

    I wish I had an answer for Rob’s final question, but all I can do is guess. Perhaps it’s because people watch a lot more commercials than violinists; exposure breeds familiarity.

  16. Come on, Drew, you know better than to counter my argument that “base salary does not accurately reflect typical musicians’ pay” with “the difference between the average principal and concertmaster compensation is nearly 50%,” or even to suggest that my position was to use concertmaster pay as an appropriate comparson point for CEO compensation.

    My argument is that average player pay is a better reflection of what musicians really make. In a 76 member orchestra you’ll have 15 principals (including concertmaster), which is one-fifth of the total. I’ve been reading International Musician for at least 20 years, and can’t recall any ICSOM or ROPA orchestra holding auditions for 10 positions in a single year. Again, using 76 players as an average contract size for these groups, that would still leave more than 80% of the seats held by musicians earning at least a few pennies more than base starting salary.

    The comparison of CEO pay to musician pay is a valid (and sometimes shocking) issue for discussion. Just please acknowledge that base starting salary is not the right number to be using (just as you note that the numbers shown on an orchestra’s 990 form probably do not reflect the CEO’s total compensation).

    You finished by saying that “I wish I had an answer for Rob’s final question, but all I can do is guess. Perhaps it’s because people watch a lot more commercials than violinists; exposure breeds familiarity.”

    One of managements’ worst sins when negotiations go public is to suggest that musicians actually only “work” a few hours each week, ignoring the vast hours spent on practice, learning scores and, in many instances, maintaining their instruments. Responding in kind, and equally tongue in cheek, how have so many musicians become expert critics of advertisng effectiveness?

  17. I think Rob is missing my point regarding using musician base pay as a reference point in the comparisons. As has already been stated, any additional amounts earned by musicians via avenues such as seniority pay add up to very little, this is especially true in ROPA ensembles. As a veteran orchestra manager Rob should already know this, although I would not project my understanding on him or any other individual without first confirming that fact.

    As such, the entire average pay vs. base pay argument is simply a red herring. For example, in New Mexico, they recently distributed a flyer which published a copy of the IRS W-2 from one of their core contract players with eight years of seniority pay, yet the listed amount is still 29% less than the minimum base pay listed in the ROPA Wage & Scale book.

    When it comes to ROPA orchestras, to assume that the average pay is HIGHER than the listed base pay for core musicians (which is what this comparison used whenever possible) is simply incorrect. Cumulatively, the musicians in these organizations do not earn the higher paying “core” position salaries. In that respect, if you want to agree that using the base salary figure is too high of a comparison point, then I might be more inclined to agree.

    Furthermore, in all fairness you would then have to begin including all of the additional perks and bonus pay executive directors receive which isn’t reported on the IRS Form 990. For example, I know of several executive directors who receive a complimentary vehicle lease from an orchestra sponsor who is also a local car retailer. Then there are expense accounts and special funding acquired for entertaining guest soloists, potential donors, etc.

    Then you can’t forget the fact that administrators don’t have to purchase and maintain tens of thousands of dollars of office equipment the same way musicians must provide their own instruments. Plus there’s the money directed toward individual professional development and travel expenses related to attending conventions (which they can use for personal gain via networking opportunities). Musicians rarely, if ever, receive as much funding for professional artistic development, even though the end result would benefit the organization in the same way that non artistic professional development benefits managers.

    In the end, the figure reported on the IRS Form 990 for executive compensation is just as much, if not more, of a “base salary” figure as the actual “base salary” figure is for the musicians. As such, the use of the reported base salary for core musicians in ROPA ensembles is precisely the correct figure to use when making these comparisons.

    Regarding Rob’s final question, I’m not so certain musicians believe they are expert critics regarding adverting effectiveness. I’ve never met one who claimed such a thing.

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