Top-paid senior staff (2019)

Gerard’s cumulative pay at API tops all trade group CEOs

New tax documents show Jack Gerard took home $10.3 million in 2018, bringing total pay to $61 million over nearly 10 years

Gerard
Jack Gerard

Jack Gerard, former CEO of the American Petroleum Institute, earned $10.3 million during his final year leading the influential trade group, according to financial disclosures filed in November.

Gerard retired from the $234 million-revenue API in 2018, ending a nearly 10-year run as head of one of the most powerful business advocacy groups in Washington, D.C. He had previously led the American Chemistry Council and the National Mining Association.

Gerard’s final months at API marked the second time his annual salary crossed into eight-figure territory. Only two other trade group CEOs have earned $10 million or more in a single year—Billy Tauzin in 2010 ($11.5 million), the year he left Pharmaceutical Research and Manufacturers of America, and possibly Jack Valenti in 2004, the last year of his 38-year tenure at the Motion Picture Association. (IRS-required reporting on take-home pay before 2008 was less explicit, so it’s unclear if Valenti received all $11 million in that year.)

Other 501(c)(6) CEOs have earned more in a single year, but those organizations were sports-related groups such as the National Football League (which dropped its tax-exempt status in 2015) and PGA Tour.

The biggest chunk of Gerard’s 2018 take-home pay—$7.6 million—came from a supplemental executive retirement plan payout, most likely a 457(f) plan, that had accumulated since the former CEO’s last big payout in 2013, when he took home pay of $13.3 million.

Gerard also has earned more over a 10-year timespan than any other trade group CEO. From November 2008 through July 2018, he earned $61 million. Even Tom Donohue, longtime CEO of the U.S. Chamber of Commerce, can’t match that record. Donohue took home $59.8 million over 11 full years, including his 2018 compensation of $6.9 million.

Tax-exempt groups are still filing their latest reports to the IRS, but it’s highly unlikely any other trade group CEO will come near Gerard’s 10-year earnings.

Well-oiled lobbying machine

Gerard began his political career in 1981 as a staffer for former Rep. George Hansen and later former Sen. James McClure, both Republicans from his home state of Idaho. He partnered with McClure in 1990 to launch a government relations consulting firm.

Gerard joined API at the very end of President George W. Bush’s administration. Bush and Vice President Dick Cheney were both oil men, and their approach to regulatory policy reflected that fact. However, the election of President Barack Obama in 2008 resulted in an administration more open to the concerns of environmentalists and other critics of the oil industry.

API would spend much of the Obama administration fighting efforts to tighten regulations against greenhouse gases, restrict oil and gas drilling on federal lands, and block construction of energy infrastructure projects such as the Keystone XL pipeline. The group is also a major critic of the Renewable Fuel Standard, which requires ethanol to be blended with motor fuels.

One advantage API has long had in its advocacy efforts is the oil industry’s deep pockets. Under Gerard’s watch the group spent more than $400 million on public relations efforts, according to tax returns reviewed by the Center for Public Integrity. Most of the money went to PR giant Edelman, although the firm cut ties with API in 2015, reportedly because it no longer wanted to be associated with organizations that funded climate change denial. (API said at the time it was not a climate change denier.)

Still, the oil industry’s fortunes rise and wane with oil prices, and in 2015 API absorbed America’s Natural Gas Alliance, a trade group that shared many members with API.

Since then the industry’s advocacy outlook has improved. President Donald Trump has rolled back several environmental regulations opposed by API and granted oil refineries a large number of exemptions to the Renewable Fuel Standard.

Gerard’s successor at API is Mike Sommers, who was chief of staff to former House Speaker John Boehner before becoming CEO of the American Investment Council. Gerard has since become a General Authority Seventy of The Church of Jesus Christ of Latter-day Saints, one of the highest positions within the church.

API’S $61 million man

Jack Gerard earned $61 million during his nearly 10 years as CEO of the American Petroleum Institute. The chart shows how much Gerard took home each year in base pay, bonus pay, and “other” pay—usually money that had been deferred from earlier years.

Gerard pay chart

*Partial year payments. Gerard was CEO from November 2008 through July 2018.
Source: Data from IRS form 990 compiled by Association Intelligence and analyzed by CEO Update

CEO compensation in small associations (2019)

This report lists the salaries of 445 CEOs at trade and professional groups revenue between $2.5 million and $5 million. The information is gathered from IRS Form 990, the disclosure document that must be filed by tax−exempt organizations, for fiscal years 2016 or 2017—the latest available. The earnings column shows take−home pay (base pay, bonuses and other pay). The deferred column is the amount earned by the CEO but not yet paid. The nontax column lists the value of nontaxable benefits.

Next

RELATED CONTENT
Small-group pay again rises modestly, is comparable to some midsize groups

ADDITIONAL SALARY REPORTS
CEO pay in large associations (2019)
CEO pay in midsize associations (2019)
CEO pay in small associations (2018)

CEO Pay

Organization Revenue Chief Execuive Base Bonus Other = Earnings Deferred Nontax
AACE Int’l. $2,864,409 Charity Quick-Borgard $158,322 = $158,322 $8,850 $16,526
Accreditation Council for Business Schools and Programs $2,539,495 Jeffrey Alderman $159,667 = $159,667 $15,967
Accrediting Council for Independent Colleges and Schools $4,628,786 Roger Williams* $261,630 = $261,6301 $1,429
ACPA-College Student Educators Int’l. $2,864,592 Cynthia Love $220,141 = $220,141 $3,869 $7,621
ACT | The App Assn. $3,347,877 Morgan Reed $250,000 $50,000 $2,560 = $302,560 $18,000 $26,719
Ag Container Recycling Council $4,712,304 Ron Perkins* $138,303 $20,745 = $159,048 $15,062 $35,414
Agricultural Retailers Assn. $3,535,005 Daren Coppock $351,843 = $351,843 $16,200 $25,589
AHRA: The Assn. for Medical Imaging Management $3,267,301 Edward Cronin Jr.* $218,279 $20,143 = $238,422 $7,359 $17,425
AICC—The Independent Packaging Assn. $4,061,516 Steven Young* $211,185 = $211,185 $6,280 $10,552
Air Traffic Control Assn. $3,326,305 Peter Dumont $636,975 = $636,975 $73,392
Aircraft Electronics Assn. $3,292,812 Paula Derks* $352,198 = $352,198 $24,654 $35,851
ALFA Int’l. $3,571,787 Peter Rogers $285,000 $10,000 = $295,000 $2,400
Alliance for Regenerative Medicine $4,015,253 Janet Lambert $165,173 = $165,1732
Alternative and Direct Investment Securities Assn. $3,021,005 John Harrison $178,195 = $178,195 $19,916
AMDA – The Society for Post-Acute and Long-Term Care Medicine $4,558,897 Christopher Laxton $261,401 = $261,401 $7,222 $19,466
America’s Blood Centers $3,616,071 Christine Zambricki* $163,881 $7,937 $192,438 = $364,2563 $18,611 $3,287
American Academy of Facial Plastic and Reconstructive Surgery $3,898,805 Steven Jurich

Small-group pay rises, is comparable to some midsize groups

Median change in CEO compensation is 3.6%, with big contribution from bonuses

CEO salary small group infographic

Smaller-group CEO salaries continued their modest but steady upward march with another year of a median increase of 3.5% or higher.

CEO Update analyzed the most recent tax filings for associations with revenue between $2.5 million and $5 million. The median change for executive base-and-bonus pay was 3.6%, on par with 3.5% the year before but down a bit from 3.9% in our 2017 survey. Small-group leaders again trailed their counterparts at midsize and large associations, where the median change in our 2019 report (compared to the 2018 survey), was above 4%.

However, compensation at these smaller groups is not as far below that at midsize groups as one might expect, given that association revenue is the biggest determinant of compensation.

Mark Graham, CEO Update’s in-house compensation expert, said the report suggests that there is a de facto minimum wage for association executive leadership.

Two data points make the case: the median and the 10th percentile.

Median pay—the point at which half of CEOs earn more and half earn less—for CEOs who lead organizations with revenue between $5 million to $7 million is only 19% more than that in the smaller associations. That’s only a $47,000 pay bump to run organizations with a median budget 63% larger and 50% more staff. And pay at the 10th percentile—the point at which 90% of CEOs earn more—is just $28,000 apart.

The median revenue of associations in our small group survey this year was nearly $3.6 million, in line with previous years. The median take-home pay (base, bonus and other) of all trade association CEOs in the report was $302,826, compared with $219,082 for professional society leaders.

But in a departure from previous small-group reports, the median change in trade association CEO compensation was much higher (3.8%) than that for professional society chief executives (3.0%). At larger groups, it’s common for trade association pay to rise faster than professional society compensation year after year.

Lyn McCloskey, a principal and compensation expert at consulting firm PRM, said the firm’s own data shows that base pay among smaller nonprofits rising in the 3% range—about in line with salary increases for all employees at such groups. What is different is that at-risk pay as a percentage of compensation is rising for the chief executives.

Gender gap

Gender representation among CEOs at smaller groups is another topic worth examining. Thirty-seven percent of chief executives in the small-group survey are women, compared with 33% in midsize associations ($5 million to $12 million in revenue) and 27% in the largest groups (revenue above $12 million).

McCloskey said promotions from within may partially explain the gap: Such internal advances to the top spot may be more common at smaller groups than larger ones. Larger groups are more likely to hire from the outside, whether from another association or from industry, where men dominate the talent pool, she said.

CEO compensation in midsize associations (2019)

This report lists the salaries of 473 CEOs at trade and professional groups revenue between $5 million and $12 million. The information is gathered from IRS Form 990, the disclosure document that must be filed by tax−exempt organizations, for fiscal years 2017 or 2018—the latest available. The earnings column shows take−home pay (base pay, bonuses and other pay). The deferred column is the amount earned by the CEO but not yet paid. The nontax column lists the value of nontaxable benefits.

Next

RELATED CONTENT
CEOs at midsize groups see another increase in median pay above 4%

ADDITIONAL SALARY REPORTS
CEO pay in large associations (2019)
CEO pay in midsize associations (2018)
CEO pay in small associations (2018)

CEO Pay

Organization Revenue Chief Executive Base Bonus Other = Earnings Deferred Nontax
340B Health $9,930,565 Ted Slafsky* $371,273 $92,487 $19,921 = $483,681 $76,791 $34,668
ACA Int’l. $7,827,452 Patrick Morris* $428,091 = $428,0911 $10,800 $13,473
ACA, America’s Communications Assn. $5,763,786 Matthew Polka $297,745 $28,726 $258 = $326,729 $9,658 $27,845
Accreditation Council for Continuing Medical Education $6,196,584 Graham McMahon $466,816 $50,000 $1,744 = $518,5602 $840
Accrediting Bureau of Health Education Schools $5,721,445 Florence Tate $281,257 = $281,257 $13,780 $20,467
Accrediting Commission of Career Schools and Colleges $8,597,243 Michale McComis $293,196 = $293,196 $28,810 $30,905
Acoustical Society of America $6,263,016 Susan Fox $243,791 = $243,791 $24,038 $12,034
Advanced Energy Economy $5,454,049 Graham Richard* $313,261 = $313,2613 $7,956 $37,378
AIGA, The Professional Assn. for Design $6,152,960 Julie Anixter $299,519 = $299,519 $14,976
Air Conditioning Contractors of America $5,786,172 Paul Stalknecht* $393,946 $106,274 = $500,220 $26,500 $12,729
Air Movement and Control Assn. Int’l. $6,200,180 Mark Stevens $224,391 = $224,391 $23,138 $17,913
Alliance for Telecommunications Industry Solutions $9,158,127 Susan Miller $592,167 $569,365 $35,168 = $1,196,700 -$74,277 $48,558
Alliance of Community Health Plans $6,720,764 Ceci Connolly $406,157 $80,000 = $486,157 $21,600
Alliance of Motion Picture and Television Producers $10,358,154 Carol Lombardini $1,598,860 $471,835 $18,000 = $2,088,695 $21,900 $11,985
Aluminum Assn. $8,112,057 Heidi Brock $369,130 $128,037 $26,196 = $523,3634 $75,313 $24,210
Ambulatory Surgery Center Assn. $9,041,389 William Prentice $508,305 $101,661 $26,715 = $636,681 $68,660 $23,255
American Academy of Audiology $7,478,952 Tanya Tolpegin

Take-home pay is often not the best measure of what CEOs earn

Benchmarking using annual compensation—base, bonus and deferred pay—provides clearer insights into salary arrangements

currency

May 10, 2019

Chart-topping take-home pay figures certainly get the attention in salary reports like the one published last issue by CEO Update, but when benchmarking compensation, researchers advise taking a different approach.

Annual compensation, a term developed and defined by CEO Update researchers, is a more accurate way to measure pay, because it ignores one-time payments. Instead, it includes the annual deferred contributions an organization makes toward an executive’s retirement.

Back in 2008, the IRS created a treasure trove of information on compensation when it standardized and expanded salary reporting for executive staff in tax-exempt organizations. Those new rules required organizations to split pay into five segments on Schedule J of the Form 990: base compensation, bonus and incentive compensation, other reportable compensation, retirement and other deferred compensation, and the value of nontaxable benefits.

The first three categories—base, bonus and other—represent take-home pay, which equals the amount reported on an individual’s annual W-2 filed with the IRS. This amount includes one-time payments received in the calendar year, such as retirement payouts and even severance, which can distort averages and medians, especially in smaller datasets.

Annual compensation, however, disregards those one-time payments in the other category. Instead, annual compensation includes the amounts in the base and bonus columns, plus the amount in the deferred compensation column. In the vast majority of cases, the deferred column represents payments the organization has contributed toward retirement plans, such as traditional 401(k)/403(b) plans, but increasingly those payments also go toward supplemental executive retirement plans (SERP), such as 457(b) and 457(f) plans.

In a small minority of cases, the deferred compensation category is used to identify a bonus earned one year but paid in the next year. While rare in associations, distinguishing deferred bonuses from deferred retirement payments requires closer examination of the tax document.

Benchmarking using annual compensation, though, can be welcome news to those looking to boost their salary during contract negotiations. Annual compensation figures are more inclusive of important cash benefits that are often part of the recruitment and retention process, and annual compensation medians are often higher than take-home pay medians.

Case in point, the median take-home pay in CEO Update’s most recent salary report of chief executives in large associations was $565,407, but the median annual compensation was $598,588, higher by 5.9%. In last year’s report of CEOs at midsize associations, the take-home pay median was $316,755 but the annual compensation median was 6% higher at $335,775.

Proper benchmarking does need to consider when the individual was hired, because first-year executives often don’t get paid a full bonus or receive full contributions toward retirement plans.

The IRS disclosures also don’t reveal the full range of potential bonus pay—and how much more an executive might have earned. Modern incentive structures are paid out in accordance with meeting specific goals. If the executive fell short of the mark, he or she could have forfeited a part of the potential bonus.

COMPARING TAKE-HOME PAY WITH ANNUAL COMPENSATION

Category

Median Revenue

Take-home Pay

Annual Comp

Diff.

Take-home pay: Middle 50% range

Annual compensation: Middle 50% range

Large Assns

$26,221,643

$565,407

$598,588

5.9%

$403,008—$917,701

$418,357—$935,715

Large Trade

$25,529,899

$722,470

$763,178

5.6%

$429,994—$1,339,100

$458,368—$1,358,076

Large Professional

$26,288,834

$492,535

$523,625

6.3%

$366,693—$654,660

$392,730—$692,205

Large-DC based

$26,425,787

$642,784

$686,101

6.7%

$429,684—$1,215,974

$457,724—$1,240,194

Large-Chicago based

$28,969,195

$532,161

$596,760

12.1%

$397,416—$782,381

$425,033—$765,481