Monday, October 29, 2012

Wasted Donation and Taxpayer's Money In Other States

Picked up from the St. Louis Post- Dispatch

n April 2010, Nina M. Archabal retired after 23 years as director of the Minnesota Historical Society in St. Paul. At the time of her retirement, she was being paid $285,000 a year, way better than the $185,000 that John Herbst was making as head of the Indiana Historical Society or the lousy $146,600 that Paul Levengood was making as head of the Virginia Historical Society.
On the other hand, Ms. Archabal was making about $108,000 a year less than the $393,281 that Robert R. Archibald was paid to run the Missouri Historical Society that year.

On the third hand, I did find a history-plus museum director who was paid more than Mr. Archibald: Thomas Ott got $523,158 for running the Smithsonian Institution. Mr. Archibald’s total compensation package is $8,000 less than that.

The base compensation figures all come from the Form 990s that not-for-profit organizations are obliged to file with the Internal Revenue Service.

I was drawn to the Archabal/Archibald comparison by the similarity in their names and the fact that they both took over their respective institutions at about the same time — Ms. Archabal in 1987 and Mr. Archibald a year later. Both presided over major capital programs. The Missouri History Museum in Forest Park attracts more visitors every year — 364,000 in 2011 to the Minnesota History Center's 230,000.

On the other hand, you can get into the Missouri History Museum for free. Minnesota charges 11 bucks. Plus the Minnesota Historical Society operates 25 other state historical sites (“See Lindbergh's Boyhood Home!”) which draw another half-million visitors a year.

A little more than half the Minnesota society's $63 million in revenue last year came from the state government, which made big cuts this year. The Missouri Historical Society's budget is about a fourth of that, but it's more secure; it has its own pot of money, thanks to its inclusion in the Zoo-Museum tax district.

To add it all up, the Minnesota operation is four times the size of Missouri's and draws 366,000 more visitors. And yet the Missouri Historical Society Board of Trustees was paying Mr. Archibald $108,000 more than Minnesota was paying Ms. Archabal and deems him so irreplaceable that they just gave him a new $375,000 contract. Plus perks. Lots of perks.

I suppose it was the minivan that got to me, the 2011 Toyota Sienna that the History Museum is providing Mr. Archibald. Last summer I bought a 12-year-old Sienna with 80,000 miles on it and thought I got a good deal. I didn't know from good deals.

By comparison with the $33,000 a year housing allowance, the 410 vacation days he can pile up toward his retirement, the six weeks of “historical research and writing” leave he gets each year on top of four weeks' vacation, the minivan isn't such a big deal. I shouldn't be so jealous.

But the idea that taxpayers should underwrite these goodies to keep Bob Archibald from straying is preposterous. The man is 64 years old. He's got nearly a quarter-century's worth of schmoozing invested in his board of trustees and his donors. What's he going to do, start over somewhere else?
Where else is he going to find a history museum with a guaranteed $10 million annual pot of taxpayer money and a board that has been cultivated to think he walks on water? A board willing to say “Great deal, Bob” when he spends nearly $1 million of museum funds on a closed barbecue joint on a contaminated lot on Delmar Boulevard?

Usually a guy who wants to be his own boss has to start his own business. But not always.
Since the mid-1970s, when free agency began to take over baseball, corporate executives have been pushing the idea that they, too, are superstars who must be compensated lavishly to keep them from, say, moving to Anaheim.

Compensation committees on board of directors tend to buy the idea, often because they include peer CEOs whose own values go up when they overpay their pals. But it turns out that corporate skills aren't readily transferable.

In a new study, Charles M. Elson and Craig K. Ferrere of the University of Delaware concluded that CEO talent doesn't transfer.

“It’s a false paradox,” Mr. Elson told The New York Times. “The peer group is based on the theory of transferability of talent. But we found that CEO skills are very firm-specific. CEOs don’t move very often, but when they do, they’re flops.”

CEOs promoted from within the company tend to generate more shareholder value; they understand the business and culture. You want to steal an executive, look for a young one who's underpaid somewhere else.

Say you're the Missouri Historical Society and Archibald threatened to leave. You'd hand him an empty box and call someone like this Paul Levengood guy who is 41 and was making the lousy $146,600 in 2010 at the Virginia Historical Society.

Virginia's got everything from Jamestown to Mount Vernon to Appomattox. Think he can't handle Lewis & Clark? Offer him 200 K. Throw in a minivan and you're still way ahead.
Kevin Horrigan is deputy editorial page editor of the Post-Dispatch. Follow him on Twitter at @oldsport

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