Bloated Payroll

Boston Catholic Insider
February 18, 2012

http://bostoncatholicinsider.wordpress.com/2012/02/18/bloated-payroll/

We got word that the Boston Archdiocese is not going to answer our questions about the deceptive claim of a “balanced budget” in the 2011 Annual Report, and that will be the topic of an upcoming post. In the meantime, we thought we would take a closer look at the bloated payroll, which contributed to what the Annual Report shows is a $4.2M operating loss for 2011. We also look at the slow pace of action by the new Compensation Committee.

Number of People Earning More than $150K

According to the annual report for the 2011 fiscal year (page 83), the number of people making $150K or more in that fiscal year was 17. If you compare that to the 2006 Annual Report, before outgoing Chancellor Jim McDonough arrived, you will see there were just 2 people in the Chancery paid more than $150K. So the number of people making $150K or more per year has increased by more than 8X since 2006.

The total compensation paid to people making more than $150K has also increased by a factor of about 9X since 2006. In 2006, those two people paid over $150K per year were paid $393K in salaries. According to the 2011 Annual Report as well as information from other sources, the 17 people at the Pastoral Center making more than $150K today in aggregate are paid somewhere close to $3.5M a year in salaries. Just to reiterate, that is about 9 times more than was paid in 2006 in $150K+ salaries vs 2006.

Here are the six-figure salaries that were disclosed, or implicitly disclosed in the 2011 annual report (pages 76-80):


* Note: Kathleen Driscoll is reported at $38,462, but she was on the payroll for only about 2 months in that calendar year, so we extrapolated for 12 months to get $230K.

The names of the 6 other people paid $150K+ were not published in the annual report, but you can just look at the Pastoral Center directory for the high-ranking titles to get a good sense for who they are:

Joseph D’Arrigo, Executive Director, Clergy Benefits

Mary Doorley, Vice President of Development

Carol Gustavson, Executive Director, Lay Benefits and Building Services

Mary Myers, Vice President of Development

Steven McDevitt, Director of IT

John Straub, Executive Director Finance and Operations, Interim Chancellor

Add it all up, and you get pretty close to $3.5M in salaries alone not counting benefits, which add another 15% or so on top of that. If the archdiocese were to put a salary cap of $150K on all lay executives, that would cut $1M in salary expenses alone in one fell swoop! But not much is happening to address the bloated salaries, and what is happening appears to be progressing at a glacial pace. It could also end up being just window-dressing.

Long time readers will recall that the Finance Council approved creating a Compensation Committee to look at executive compensation in November of 2010. That was 15 months ago. What has actually been accomplished since then? Not much. They hired a consultant who is working on a report. BCI is not making this up. (More on that in a separate post).

At best, the Compensation Committee says they will have a report and recommended salary bands by June of 2012–more than 20 months after the Finance Council created the committee to look into this. To BCI, it certainly does not seem anyone is in a big rush to act on this.

Even with what is reported, we only know that they “anticipate” the Committee will be in a position to “make recommendations” around the time of the annual performance reviews. How about, “We are deeply troubled by the wasting of donor funds on excessive salaries and bloated payroll at 66 Brooks Drive, and we absolutely commit we will have reduced all salaries that are out of line by date Y?”

40% of parishes cannot pay their bills. Meanwhile, at the Pastoral Center, the amount and number of $150K+ salaries have grown by more than 8X over the past 5-6 years. They are paying about $3,500,000 in such salaries today vs $373,000 in 2006–$3.1 million more to people making $150K+ a year.

Are we really getting our money’s worth from these “best and brightest?” Why is the Finance Council fiddling while 66 Brooks burns through precious donor funds in excessive salaries? Does anyone really care about doing something to address this problem?

For the sake of the fiscal health of the Boston Archdiocese and ability of the diocese to continue the saving mission of Jesus Christ, we hope and pray something changes here, and quickly. What do you think?