Boston Archdiocese Bloated Payroll: Inaction

Boston Catholic Insider
February 21, 2012

bostoncatholicinsider.wordpress.com/2012/02/21/bloated-payroll-inaction/

BCI obviously struck a raw nerve with our last post, "Bloated Payroll" about the 17 people earning more than $150K a year. We continue today with a brief recap on that post, and then below our commentary on how the Boston Archdiocese has managed to delay acting on this problem for years and continues to delay.

By means of a recap from last time, the annual report for the 2011 fiscal year (page 83), says the number of people making $150K or more in that fiscal year was 17. In the 2006 Annual Report, 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.

In addition, the total compensation paid to people making more than $150K has also increased by a factor of about 9X since 2006. The Boston Archdiocese is paying about $3,500,000 in such salaries today vs $373,000 in 2006–$3.1 million more to people making $150K+ a year. The archdiocese has a fiduciary responsibility to be a good steward of donor funds, and this does not appear to be happening.

Once again, here are 11 of the 17 $150K+ 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.

As we have said before, if the archdiocese were to put a salary cap of $150K on all lay executives, that would cut $1M in salary expenses alone!

What is happening to address the bloated salaries? Well, the Finance Council approved creating a Compensation Committee to look at executive compensation in November of 2010. That was 15 months ago.

Their charter says, "The Committee shall submit to the Finance Council an annual report on the compensation practices of the Archdiocese, which shall be included in the annual financial release of the Archdiocese." In the 2011 annual report, the Compensation Committee did give a "report," but it just talked about activity, with no results yet. Here are a few excerpts (see pages 83-84 for the full text):

"The Charter of the Finance Council establishes a Compensation Committee with responsibility for overseeing and making recommendations regarding the compensation of senior lay executive employees…

The Committee has determined that all employees of the corporation sole and all members of the Cardinal's Cabinet paid $150,000 or more in annual salary will be treated as "senior lay executives." At present, that group comprises 17 individuals. The Committee reached that decision because this definition captured all executives heading major departments and functions, as well as others with critical areas of responsibility…

A draft statement of Compensation Philosophy for Senior Lay Executives has been prepared by the Committee and will be submitted to the Finance Council for consideration at its regularly scheduled meeting in February 2012. In developing the draft, the Committee has placed the employment and compensation of senior lay executives in the context of the Church's mission and challenges. It is the Committee's belief that the Church is best served by senior executives who are distinguished by their competence, compassion, efficiency and effectiveness. We believe that the compensation of those executives should enable the Archdiocese to attract and retain highly talented and motivated people whose achievements and personal goals are in harmony with the teaching and mission of the Catholic Church. We will stress the importance of compensation that is just, both in terms of internal equity and external competitiveness. External competitiveness will be measured by comparison with other organizations in the same market for talent. For all positions, this will include Catholic dioceses and archdioceses and not-for-profit organizations. Hiring for some positions requires that the Archdiocese compete with for-profit businesses, and for those jobs, compensation practices in that sector will also be taken into account. The Committee recognizes that senior lay executive compensation must reflect economic realities within the Archdiocese, as well as regionally and nationally. We think it is critical that we achieve consistency and adherence to common reward principles within the executive leadership team and that compensation for this group be based on merit, and linked to clear descriptions of responsibilities and regular performance assessments.

The Committee has engaged the services of a senior consultant specializing in not-for-profit executive compensation at the global firm of Aon Hewitt. At the Committee's direction, its consultant has undertaken a survey of compensation practices at nine other dioceses and archdioceses in the United States, and reviewed compensation information in public and proprietary databases of not-for-profit institutions and for-profit businesses. The 17 senior lay executive positions in the Archdiocese of Boston are being matched, based on job responsibilities and reporting levels, with those of other organizations, and pay levels are being compared. The survey results will also be used to create recommended salary bands for each position, as guidance in future compensation decision-making. We anticipate that the Committee will be in a position to make recommendations regarding salary levels in conjunction with the annual performance reviews scheduled for the end of the current fiscal year.

• The effort comes across sounding like they will justify many–if not all–of the high salaries on the basis that these people could be earning $X in a private sector for-profit company, and this is what the archdiocese needs to pay in order to attract "highly talented" senior executives.
• The archdiocese staff used to maintain its own information about comparable salaries in other dioceses as part of the normal course of business in years past. Now it takes an expensive outside consultant to do that work.
• Why is a comparison of salaries in for-profit businesses really relevant here? The people are working for the Catholic Church. If they choose to forego the salary they could make in the private sector in order to work to advance the mission of the Catholic Church, that is a noble choice, but it is their choice. The only comparable that should matter is a comparison to how other Catholic dioceses pay for these positions, consistent with what the Catholic Church can afford to pay.
• Who is writing the clear descriptions of responsibilities?
• Why are goals and measures of success not included in this?
• Who exactly is performing the regular performance assessments against goals and expected results for the likes of the Secretary for Education, General Counsel, Secretary for Catholic Media, Chancellor, Secretary for Communications, Secretary for Institutional Advancement, etc?