Sunday, June 24, 2007

Overpaid Executive

This really gets my goat!
World Herald Article
Symphony pay gap flap off-key, chairman says
Omaha Symphony musicians have gotten patrons talking at their past few concerts — and not just about their performances.

Rob HallamHuddled in the Holland Performing Arts Center lobbies during intermissions, audience members have been discussing the leaflets that musicians distributed before each program, detailing their current contract dispute.
"Management . . . raised CEO Rob Hallam's compensation on average 20 percent a year for each of the past three years," the leaflet states. It also says that "Hallam hired his wife as a consultant to the Omaha Symphony at over $99,000.
"The musicians — who have received raises of 2 to 3 percent over the same period — find these figures hard to swallow. On Friday, they released a statement that expressed a "vote of no confidence" in Hallam's leadership.
For anyone who has been watching the dispute between the musicians and management over the 2007-08 contract, the musicians' latest move is no surprise. Negotiations broke down more than three weeks ago, and subsequent meetings haven't been scheduled. Musicians are seeking a base pay raise higher than the 2.5 percent increase management has offered.One of the biggest points of contention in the dispute is the gap between the musicians' base pay — $28,327 in 2005-06 — and Hallam's salary — $205,152 for the same period. (Neither figure includes benefits.)
Hallam could not be reached Friday afternoon to respond to the musicians' no-confidence vote. He previously referred questions about his pay to the chairman of the Omaha Symphony board of directors, William A. Fitzgerald.Fitzgerald said there are solid reasons for the board's compensation decisions.
"That is only one side of the story," Fitzgerald said, referring to the information in the musicians' leaflets.It's true that Hallam's total compensation has increased by more than 5 percent annually over the past few years.It's also true that Hallam's wife, Mary Prefontaine, was the interim vice president of marketing for more than a year, and in her last full year was paid $99,000.The orchestra's board approved and still supports both decisions.
While Hallam's total compensation might have increased by more than 5 percent over the past few years, Fitzgerald said, his base salary has increased by only 2.5 to 5 percent each year since the 2003-04 season, which was his first full term as the orchestra's chief.The rest of the money — which fills the gap between his 2003-04 compensation of $160,500 and his 2005-06 compensation of $210,050 — comes from incentive pay.
When Hallam was hired, the board set up a program that gives him financial rewards for meeting goals related to ticket sales, contributions and attendance. Fitzgerald declined to provide the specifics of those goals. "If he meets or exceeds (the goals), he is going to get what we agreed to as incentives," Fitzgerald said.
The musicians say Hallam's salary still is way above average for executives at comparable orchestras, with or without the incentive pay.During the 2004-05 season, the average salary for top executives in the Regional Orchestra Players Association — a group of about 70 orchestras, including the Omaha Symphony — was about $106,000, said Drew McManus, a Chicago-based orchestra analyst and consultant. McManus said he doesn't expect that average to change much when he gets figures for 2005-06.The Omaha Symphony, with a budget of $6.5 million, is in this group because of the number of full-time players it employs. The group also includes orchestras with much smaller budgets — around $1 million — such as the Green Bay (Wis.) Symphony and the Shreveport (La.) Symphony.
McManus said executive salaries have generally been increasing "exponentially" over the past few years."Boards are leaning toward wanting to pay what they would pay in the for-profit world so they can attract that level of talent," McManus said.Omaha Symphony board members stand behind their compensation package for Hallam. He has presided over substantial increases in revenue and a music director search that resulted in the hiring of Thomas Wilkins."He has been very good at managing the overall process of running the symphony," Fitzgerald said.Board members also point to good performance as the reason for hiring Prefontaine. Shortly after Hallam took over, the orchestra was having difficulty finding a vice president of marketing, Fitzgerald said."Somebody on the board commented that Mary had a marketing background, so we put her in as an interim," Fitzgerald said. "It wasn't just 'Let's pay her some money, too.'"Prefontaine had leadership jobs in marketing for Tourism Vancouver and the Vancouver 2010 Winter Olympic Games Bid Corp.
The Omaha Symphony board — not Hallam — set her compensation at $99,000 because it was "at or below the market for that job at that time," Fitzgerald said.The person who held the job before Prefontaine was paid less. However, Lex Poppens, who is in the job now, is paid more, Fitzgerald said. Poppens declined to give his specific salary but said it is "market-driven."Prefontaine decided after a little more than a year to take a job as the executive director for the Institute for Career Advancement Needs."The primary reason for me leaving the Omaha Symphony was because of this amazing opportunity I now have as the executive director of ICAN," Prefontaine said. "It was incredibly appealing to me."Prefontaine said she didn't see it as a conflict for her to work with her husband. Neither did the board, Fitzgerald said."I don't think there was (a conflict)," Fitzgerald said. "But was it perceived by other people? The answer is yes."

Another story.

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