November 30, 2012
By Mark R. Graham
The number of association chief executives with compensation packages valued at more than $2 million swelled in fiscal year 2011, credited in part to one-time retirement payouts.
The fattest paycheck went to Tom Kuhn, president of the Edison Electric Institute.
His 2011 compensation totaled $6.7 million, enhanced by a $2.4 million supplemental executive retirement plan (SERP) payment.
This year's early batch of tax returns lacked the remarkable, eight-figure salary reported for Billy Tauzin after his departure from the Pharmaceutical Research and Manufacturers of America in 2010, but the fact that more CEOs crossed $2 million is notable at this stage, given that not all 2011 tax documents have been released.
More big salary numbers are expected, including from documents from the National Association of Broadcasters, the National Retail Federation and the Recording Industry Association of America in the first quarter of 2013.
Interesting to note: Tauzin's 2010 $11.6 million final paycheck wasn't so final. In 2011, PhRMA reported an additional $432,837 paid to the former Louisiana congressman.
The new head of PhRMA, John Castellani, earned $1.8 million in 2011 and an additional $512,226 in deferred compensation. His former employer, the Business Roundtable, also paid him $262,500 in the same year. Castellani left BRT in September 2010.
This CEO Update analysis of highest paid CEOs did capture some unlikely candidates, like David Warren, longtime head of the National Association of Independent Colleges and Universities.
His take-home pay was more than $2.1 million, but Warren's salary was boosted by $1.6 million in deferred pay that accumulated for more than 17 years, said NAICU chair Nathan Hatch.
David Karcher, executive director of the American Society of Cataract and Refractive Surgery, said his $2.7 million salary was the result of 25 years of deferred compensation that he was required to take at the end of his current employment contract. Karcher also said he renewed his contract with ASCRS for another five years.
Super payouts decline
Deferred compensation arrangements written today rarely stretch beyond three to five years, so these sorts of super-payouts are declining. The largest reported payout was in 2005 for Ed Kavanaugh, retiring CEO of the Personal Care Products Council. More than 30 years of deferred compensation pushed his salary to $13.2 million.
In general, CEOs who lead complex, Washington, D.C.-based advocacy organizations continue to dominate the highest paid list. Median revenue for the 20 organizations on this list is $55 million. Annual lobbying expenditures exceed $5 million.
For example, $100 million-revenue American Chemistry Council spent $10.3 million on lobbying in 2011. ACC CEO Cal Dooley earned $2.3 million, an increase of 10.2 percent from 2010.
One of the biggest salary increases went to Frank Fahrenkopf, head of American Gaming Association. His take-home pay doubled in 2011 to $4.6 million.
The median take-home pay increase for these CEOs was a modest 4.2 percent, but that is a substantial amount at this level. U.S. Chamber of Commerce CEO Tom Donohue's annual pay increase hit the median and that meant an additional $200,217 in 2011.
Some chief executives didn't even work a full year but still made this early top-paid CEO list.
Michael Powell, new head of the National Cable & Telecommunications Association, earned $2.2 million last year, but that accounts for about eight months of salary. His first day on the job was April 25, 2011.
James May retired from the Air Transport Association of America (now Airlines for America) on Dec. 31, 2010, but in 2011, A4A reported $2.8 million in compensation for May, which included $1.6 million in severance.
*Chief executive is no longer with the organization.
† Late entries
1$1,600,000 in severance. Left Dec. 31, 2010.
2 $196,509 toward SERP and $108,728 SERP payout.
3 $585,156 toward a SERP
4 $1,952,556 toward a SERP
5 $2,072,200 SERP payout
6 $2,448,566 SERP payout
7 $591,601 toward SERP
8 Eight months' salary
9 $1,003,287 SERP payout