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Kling’s cash, contextualized

Last month, I reported that Minnesota Public Radio president and CEO Bill Kling was paid $606,753 for the year ending June 30, 2008. That touched off a 51-comment debate about whether Kling’s comp was appropriate, especially in the wake of new public subsidies from Minnesota’s habitat-arts sales tax.

On Sunday, the Star Tribune published its “Nonprofit 100.” (Sorry, no link; it’s “exclusively in the paper” until Wednesday.) MPR’s Bob Collins — Kling’s chief defender in the comment thread — tweeted on his personal account: “Story nobody will talk about: MPR exec compensation is lowest among Strib 100’s arts/culture breakout. Shhh. Don’t ruin the narrative.” (Anyone who knows Collins knows he works for the company but is his own man.)

Bob’s right: Kling’s comp as a share of MPR’s expenses ($114.7 million) was the lowest (0.5 percent) among 12 listed “arts and culture” nonprofits. His share was less than half the sector’s median (1.2 percent). It was, for example well below Bruce Coppock’s take for running the St. Paul Chamber Orchestra (2.9 percent of expenses). Coppack made a bit more than half as much ($367,380) as Kling for running an organization one-tenth the size ($12.7 million in expenses).

Other noteworthies: Twin Cities Public Television’s James Pagliarini (1.3 percent), the Guthrie’ Theater Foundation’s Joe Dowling (1.9 percent), or the Walker’s Kathy Halbreich (1.0 percent).

Had Kling been in any other non-profit sector, his comp would’ve been about average. According to the Strib, top-officer comp in the health care sector averaged 0.5 percent of expenses; ditto for education non-profits. Social-services big-boss payouts were just a bit higher, at 0.6 percent.

Of course, there are plenty of non-profit execs who make less, relatively, than Kling. UCare’s Nancy Feldman ($604,190) nearly matches Kling’s take but leads an organization with over a billion dollars in annual revenue and expenses. Size helps; 33 of the 37 biggest health care concerns paid execs under half a percent of expenses, as did eight of the top 12 social services providers and 15 of the top 18 educational entitites.

I’m sure there are all kinds of apples-to-oranges factors here, such as slightly different fiscal years, and dependence on donations versus “business activities,” not to mention government support. The Strib stats only reflect the top exec, not the management team, whose cost could be lean or fat, relatively.

One thing I am left wondering: Why do arts and culture organizations pay their Great Men and Great Women more, relatively than other major nonprofits? Insights welcome, as always, in the comments.

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Comments (14)

  1. Submitted by Paul Scott on 12/21/2009 - 11:34 am.

    I don’t want to pick another battle with Bob, who is indefatiguable, but I’m not sure this pay-as-percentage-of-expenses really means anything, other than as a convenient way to divert attention from very reasonable class questions which are going to be pondered more often as America settles into a post-wealth era. In the case of MPR, I think people sometimes have a problem with non profit executive pay-in-relation-to-what-it-costs-to-live-a-normal life in our society today. $600,000 is the sort of salary that supports a very privileged lifestyle, and people have a right to ask if they are comfortable spending that within an organization that goes begging every six months by way of extensive appeals to listeners’ conscience. Moreover, if you are going to evaluate pay in relation to the amount of money moved around within an organization, then the hedge fund guys really do deserve their billions.

  2. Submitted by Paul Udstrand on 12/21/2009 - 12:10 pm.

    I don’t buy this percentage of revenue math trick. Who compares compensation that way? Where are these comparisons between say an RN and a Target employee? The question is whether or not someone like Kling is earning or entitled to the compensation he’s receiving, who said calculating his comparative percentage of revenue is a way of measuring that? Does this really provide context? I don’t see how since there’s no comparison of the actual jobs these people are doing, only the organizations they work for. And of course it may well be that Kling is just not as over-compensated as some other executives. I’m not saying he is over-compensated, I’m just saying this doesn’t answer the question. I’d still like to know what his compensation has been historically. The guys accomplishments are impressive, if he worked for peanuts for twenty years I’d be willing to cut him some slack for a big payday now.

  3. Submitted by patricia west on 12/21/2009 - 12:25 pm.

    I’ve never seen any mention of Bill Kling’s other NPR-related businesses. He must have a very good lawyer to get away with selling services of PRI, or whatever it is called now, to MPR, which he heads. Let’s look at his entire empire!

    P.B. West

  4. Submitted by Amber Berg on 12/21/2009 - 12:43 pm.

    Perhaps it is not just Wall Street bankers that have excessive compensation. How can there be any justification for a non-profit CEO making over $600,000 a year. Ben Bernanke, Fed Chairman, makes less than $200,000 a year.

  5. Submitted by David Skarjune on 12/21/2009 - 01:29 pm.

    I was hit with this realization back in 2008 when I worked at the Minnesota State Arts Board that the major nonprofits were lining up to grab much of the new Arts and Cultural Heritage tax funds. I left voluntarily a year ago, have no inside information to share, but I suspected that Governor Pawlenty’s plan to abolish the state agency and actually give the tax dollars to an independent nonprofit body not subject to current Arts Board guidelines did not fall on deaf ears within the board itself. Instead, the Minnesota Historical Society and the Minnesota Humanities Center with the Arts Board are brokering a deal to line up the major players at the trough. The “13-member committee … chosen from a field of 50 applicants nominated by their peers” who will decide the pecking order speaks for itself. Yes, the Zoo, MPR, and Science Museum are all represented in the interests of Minnesota Arts & Heritage. Maybe it’s all Keillor’s fault! Oh Wo Be Gon.
    http://www.mnhs.org/achf/

  6. Submitted by Mark Gisleson on 12/21/2009 - 03:05 pm.

    Your assumption that you’ve ferreted out ALL of Kling’s compensation is disproportionately impacting this discussion.

    We don’t really know how much Kling makes, only that it is at least $600k/yr.

    And, as others have pointed out, this appears to be a uniquely uninformative way of looking at CEO pay.

    MPR pretends to be public radio, but is in fact a privately held fiefdom that is not being held accountable in any meaningful way.

  7. Submitted by Matthew Steele on 12/21/2009 - 03:16 pm.

    Percentage of revenue seems like a good way to measure somebody in a leadership position. Of course somebody leading (and growing) a $100 mil org should be making more than someone who leads a $10 mil org. These aren’t nurses or retail managers or whatever else Paul compares where there’s a market price for labor. Executive leadership compensation is a function of the risks and significance of a leader, which is represented by the size of the organization. While I’d like more detail on Kling’s Greenspring et al payouts, $600k doesn’t seem extravagent for his role at MPR.

  8. Submitted by David Brauer on 12/21/2009 - 03:31 pm.

    Folks –

    For what it’s worth, Kling’s Greenspring cash must be reported on the 990 in question, so it’s part of the $660K.

    Something that’s not would be Gather.com, with whom public radio has a contract. Kling owns shares there (not more than 3 percent, if I remember the form correctly.)

    I am not positive, but I don’t think Kling any involvement in PRI. (American Public Media, which is MPR’s co-entity, is a competitor.) He is not listed among the Top 5 or as a compensated contractor or director.

    Mark – I have not assumed I’ve ferreted out all of Kling’s bucks (see above), but the 990 is more inclusive than people think and does include wholly owned nonprofits as well as interlocking directorship payments.

    The link to the form is in the original Braublog item, or one of them.

  9. Submitted by Mark Gisleson on 12/21/2009 - 04:45 pm.

    David, thanks for clarifying the 990 information. But because of the extraordinary lengths Kling has gone to to hide his total compensation from MPR supporters, I continue to suspect there’s still more money coming in through other channels.

    Does the 990 examine the income of all of Kling’s relatives? Isn’t his wife employed by the Klingdom?

  10. Submitted by Paul Udstrand on 12/21/2009 - 05:29 pm.

    Matt,

    Make up your mind, is executive compensation supposed to be a percentage of revenue, or a function of risks and significance? Since the percentages aren’t uniform they tell us nothing. And why is an executives “risks” any higher than anyone elses? Is anyone talking about laying Kling off? Why would a percentage of revenue be a good measurement? What does it tell you about the persons performance? A percentage is the same regardless of revenue.

    Compensation high or low itself is no indication of performance. Comparing compensation doesn’t get you anywhere until you establish what an appropriate baseline is, and percentages of revenue just doesn’t get you there. All you can say is Kling is better compensated than some, and less well compensated than others, that doesn’t tell you if he’s getting paid what he should be getting paid for doing what he does at MPR.

  11. Submitted by Bob Collins on 12/21/2009 - 06:20 pm.

    I’ve been busy working today so didn’t get a chance to read this until now.

    The old thread has a lot of information that this thread could use so there’s no use tilling the field again. Same people,same comments etc.

    To clarify, however, Comment #3 makes no sense. PRI has nothing to do with Kling.
    MPR pays for programming that comes via PRI. Period.

    And what is an “NPR-related” business? Kling doesn’t have any stake in NPR.

    Facts should matter

  12. Submitted by Matthew Steele on 12/22/2009 - 03:49 pm.

    Paul, maybe I didn’t explain myself well enough: A $100 million-and-growing organization has more at stake from a leadership perspective than a smaller organization, so executives deserve higher compensation.

    This is pretty standard fare. Your CEO at your 20 person company will likely make less than your CEO at a 2,000 person company. Likewise, even in the non-profit world, there’s a reason why Kling makes more than his VPs, who make more than their directors and managers. With increasing responsibility (including the size of an organization reporting up through someone) there should be increased compensation.

    I hand over something like $12 a month to MPR, and I really don’t mind that six pennies a month goes to pay the guy who builds and grows the system.

  13. Submitted by Matthew Steele on 12/22/2009 - 03:54 pm.

    Also, Paul, you misunderstood what risks I was assessing… I meant a larger organization has larger decisions to make, and thus they place more $ and decisions in the hands of their leadership. Thus, they should be paid more.

  14. Submitted by Paul Udstrand on 12/23/2009 - 12:20 am.

    Thanks for the clarification Matt. I think it’s pretty clear that the larger an organization the more executives should get paid. The problem is these pay packages, especially in the US are so much larger than they are elsewhere, and US executives frequently underperform compared to their counterparts. For instance, the CEO of BBC worldwide makes less than Kling (about 608K in dollars) and the BBC is much larger than MPR. Even the top guy at the BBC who runs everything, radio and all the TV only gets paid about $400k more than Kling. And there’s the fact that these executives always claim they’re entitled to these big pay packages because they make the big decisions, but when things go bad they always claim someone else is responsible. And in fact, they are very well insulated from responsibility both by corporate structure, and their contracts.

    In general I think we just have a overcompensated mediocre executive class in this country in general. Over the last twenty years it’s just gotten ridiculous, from GM to Enron, to the banks the curtain has been pulled back, and all this executive genius has been revealed as anything but.

    I still can’t tell you whether not Kling getting paid what he should be getting paid, but I think I’ve explained why some eyebrows raise when they see his salary.

    By the way, BBC revenue is $7.3 billion, which means that the highest paid guy who makes about a million a year, get .02% of the revenue.

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