What US orch chiefs are paid (and it’s less than you thought)

Drew McManus has produced his indispensable annual account of orchestral salaries, based on IRS returns.

The 2013/14 list has more coherence than some past charts in which orchs tried to bury the cash by means of creative accounting and privacy claims. Some hidden benefits may still be excluded.

The top pay chart looks like this:

1 Deborah Borda, Los Angeles Philharmonic   $1,586,820*

borda dudamel

 

(*includes presidency of Hollywood Bowl)

2 Mark Volpe, Boston Symphony                        $852,607

3 Allison Vulgamore, Philadelphia O.                 $733,242

4 Gary Hanson, Cleveland O.                               $646,813

5 Deborah Rutter, Chicago Symphony               $633,619

6 Matthew Van Besien, NY Phil                           $626,489

7 Brent Assink San Francisco Sym                      $557,312

No-one else breaks half a million.

Good to see three women in the top five.

Full report here.

 

 

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  • So Doborah Borda makes double what the rest of the crowd makes. And the Friends of the LA Phil wonder why I won’t give them any money.

    • The budget for the LAPO is (was) $118 million, nearly $30 million more than the next one down the list!
      This does help account for the very high ticket prices.

  • The most any UK orchestra chief exec would come in at around the $250,000 mark, and this would be hugely exceptional. In this context these salaries look pretty huge. The US orchestral model is, to my mind, bloated and untenable.

    • A general answer would relate to their status as “non-profit” organizations.

      From “Investopedia”..

      “Section 501 of the Internal Revenue Service (IRS) tax code exempts qualified nonprofit organizations from federal taxes.”

      “Nonprofits are also exempt from paying sales and property taxes. While the income of a nonprofit organization may not be subject to federal taxes, nonprofit organizations do pay employee taxes (Social Security and Medicare) just like any for-profit company.”

      The Federal “employee taxes” amount to 15.3% of the payroll, split between employer and employee.

      • I am under the impression that, employees of any non-profit organization still pay income tax as usual. The organization gets the tax break, but not the employees.

        However, to ‘pay back’ the ‘important’ employees, good number of non-profit bad-apples provide excessive, lavish employee benefits that are non-taxable under U.S. IRS’s tax code.

        • Yes, the individuals still pay personal income tax just like any other individual or employee does on his or her income. I’m sure the figures quoted are the gross amounts these people are paid by their organizations, not net after tax figures (which would be private anyway, and would vary depending on the individual’s filing status – joint or single – and other factors, such as other sources of income, spouse’s income, deductions, credits, etc.).

        • Yes, every employee still pays their own Federal income tax and those who reside in states like NY or California also pay significant state income taxes.

  • Big 1 and Not-so-big 5. 🙂

    Seriously, those CEOs are hired to *spend* money. Why they make as much money as the other CEOs who are hired to *make* money is beyond me.

    In fact, if you are a CEO of a company who’s doing business, you need to make the ledger looks great with positive income and enough cash flow.

    If you are CEO of a non-profit organization, however, your job is to make sure your ledger look red, or barely black. An ledger in black would do you no good in fundraising! If you are a manager who deals with departmental budget, you’d know exactly what I meant —- if you have surplus in your dept’s budget, you may get LESS funding next round. So many department managers would spend whatever surplus money left before the next budget circle.

    I’d say those high-paying executives earn their high pay if they have surplus in the ledger AND contribute some of that into, say, musician’s pension fund.

  • I wonder how this is absolutely anybody’s business apart from those earning the income. This is a gross invasion of privacy.

    • Since these organizations often rely heavily on donors, they need to be transparent about what they pay various staff in order to keep donations coming and to demonstrate to donors how their money is being spent. Also, to the extent some of them may rely not just on private individual donors, but on donations of various other tax-exempt foundations, corporations, or governments, they may in fact be required by law to disclose such financial information. If you’re worried about people knowing what you make, then don’t take a job with such a public organization.

    • I believe it is public information, gleaned from the IRS tax forms (990s) of these organizations. The IRS requires that the organization list highly compensated executives (the threshold used to be $50K per annum and was boosted some years ago to $100K per annum).

      • I forgot about that aspect. Aside form potential donor satisfactions issue, since these organizations are often non-profits themselves, certain tax information and executive salary info may be required to be public anyway.

        • The correct way to do it – and to protect individual privacy – is this:

          Expenditure:

          Advertising….X
          Venue ………. X
          Musicians……X (and that includes the conductor)
          Advisers……. X

          Very easy. But you cannot leverage any political gain out of this manner of doing things.

          Accountancy 101.

    • When your organization is subsidized by the government by getting a pass on numerous taxes, the taxpayers have a right to know what’s going on inside.

      If they want privacy they can give up that tax-free status.

    • When they solicit me to donate money, it’s my business where the money is going. And when it goes to give Borda a multi-million dollar salary, it’s definitely my business. Let her find another sucker. I much rather give my contribution to the Harmony Project.

    • That’s an excellent question, and one that deserves to be asked. In a nutshell, financial transparency includes compensation levels to help bolster the integrity of US nonprofit status by providing a way for donors to assess accountability.

      Along with compensation, that means nonprofits must disclose the policies used to determine compensation, establish conflicts of interest policies, etc. The Internal Revenue Service actually provides a good bit of information on this and related ethical guidelines. It is worth mentioning that the agency implemented some substantial changes back in 2008 that regulate reporting thresholds and taking a closer look at supplemental income: https://www.guidestar.org/Articles.aspx?path=/rxa/news/articles/2008/irs-changes-requirements-on-reporting-nonprofit-executive-compensation.aspx

  • The head of the Chicago Symphony is Jeff Alexander. he replaced Deborah Rutter who is now at the Kennedy Center.

      • Correct, it’s important to note that the reports cover the 2013/14 season. As is the case with every annual orchestra compensation report at Adaptistration, the most important element to keep in mind is the respective figures do not encompass the current season.

        Although it isn’t unusual to expect that the most recent figures available would cover the previous season, that’s not how things work thanks to a few key elements:

        1) Most professional US orchestras maintain a fiscal year structure that begins and ends at some point from June to August; as a result, they tend to file their annual return several months later than the typical April 15 deadline that applies to individuals.

        2) When you add that date against the length of time the IRS takes to process and release the returns (anywhere from six to nine months), you arrive at the seemingly odd gap of the report being a season later than expected. Interestingly enough, if the IRS ever adopts standard open data practices, the additional gap will all but vanish and the data would be made available in a searchable format. Having said all of that, don’t hold your breath for it to happen anytime in the near future.

        The end result is the most recent season available with data for every potential orchestra in these reports is two seasons behind the current season.

        You can find that information and more in the series’ introduction article: http://www.adaptistration.com/blog/2016/06/20/2016-orchestra-compensation-reports-introduction/

        If nothing else, it provides a fascinating look at how the US nonprofit regulations impact US orchestras.

  • It leaves a bad taste in my mouth when people discuss other peoples’ incomes. Irrespective of public sponsorship people are entitled to earn money and have privacy. Otherwise, it’s just another form of indentured slavery.

    • It leaves a bad taste in my mouth when people preach the benefits of arts and music to the community, and the importance of donating to the arts and music, then use those donations to line their own pockets.

      • Fair enough. However, the line between a well-deserved financial reward and excessive “pocket-lining” is so arbitrary and subjective that everyone will draw it at a different figure. Arguing about exact number of dollars or other currency that “should” be paid for any particular job is therefore pointless.

        • Allison Vulgamore ran the Atlanta Symphony into a multi year, multi million dollar deficit that resulted in staff furloughs, cuts in salary and benefits, and 2 orchestra lockouts…the price she paid? She jumped ship as it was sinking and went from an overly generous compensation package in ATL to an even more prestigious position with @ 30% increase in compensation…these organizations are suffering self inflicted wounds from over valued administrators.

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