Nonprofit Newswire | Compensation Slows for Heads of NY Based Cultural Institutions

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April 26, 2010; Source: New York Times | Some say it’s the economy, others say it’s increased public scrutiny of nonprofit spending. But whatever the reason, the New York Times finds from a comprehensive survey of cultural institutions across the country that pay for top executives and many of their lieutenants has been frozen or reduced. Jennifer Bol, a consultant at Spencer Stuart, an executive search firm, told the Times: “Most people in senior leadership roles at cultural institutions are at or below where they were in 2008. Growth in these compensation levels really stopped.”

But before you get out your hankies, its important to remember the lofty pay some of these people enjoy. Salaries for 2008 range from a high paid to Thomas Krens, director until that year, of $2.74 million to $194,966 for Julian Zugazagoitia, director of El Museuo del Barrio. And like it or not, pay and related governance issues are becoming more routine topics at board meetings, according to the newspaper. “The times demand it. Our board demands it.” said Alan H. Fishman, chairman of the Brooklyn Academy Music.

Changes to the IRS Form 990 that nonprofits must file, requiring arts organizations to explain their rationale for top executives’ pay is also cited as a reason for changes to executive pay. In an article in the March-April issue of Museum magazine, Maxwell L. Anderson, a former director of the Whitney Museum of American Art, writes that the new IRS requirements “effectively stripped away the fig leaves of our cultural executives.” Anderson, who now runs the Indianapolis Museum of Art, adds, “It is a foregone conclusion that excessive compensation and first-class travel will need convincing explanations from here on out.”

Money still matters, however, and several people interviewed for the article say the job can be tough and it “requires a capacity to manage budgets, buildings, programming, artists, contributors, audiences, trustees and public officials across a day that routinely stretches into nights of performances and donor events.” Money also matters when attracting top talent. Commenting on the compensation package worth about $1 million a year that it took to lure Michael Govan from the Dia Art Foundation in New York to become the director of the Los Angles County Museum of Art in 2006, philanthropist and its main benefactor, Eli Broad, said, “He wasn’t looking for a job. We wanted him, and we had to induce him to leave where he was, and the financial package was a major part of that inducement.”—Bruce Trachtenberg