Finance Council Top Ethical Concerns: #4: Compensation–Six Figure Salaries

Apologies for the delays with our latest episode in the series on Boston archdiocesan deception, mismanagement, and corruption.  This started out as a short post, but just kept growing to the point where we have sub-divided it and will run more next time. As you know, we started with “Systemic Corruption,” then have moved to the “Top 10 Ways the Finance Council is Conflicted, Self-Contradicted, or Perhaps Even Corrupted.”  Click the following links to read #1: Consultation on Performance or Removal of the Chancellor, and #2 Term of Service, and #3 Conflicts of Interest. Today we continue with:

#4 Compensation–Six Figure Salaries

Key takeaway for today is that the Boston Archdiocese is paying 6-figure salaries to a lot more people than ever before–and although the Finance Council has in its charter the responsibility for consulting and overseeing this area, it is not at all clear what good their judgment, advice, and oversight have accomplished here in recent years. Nor is it clear how the apparent belief and practice of paying comparable or better pay than private-sector jobs is helping advance the mission of the Catholic Church in Boston. Beyond that, it is also questionable how the newly created Compensation Committee will help fix the problem vs merely provide air-cover to justify the existing practices, or potentially make things worse.  But we will save some of this for tomorrow.

Charter says:

Article III, Responsibilities, Section F: To oversee and provide consulting for employee compensation and benefits policies, including retirement programs.

BCI Concerns

1) The amount of money paid out in six-figure salaries is increasing at a dramatic rate annually, and given that the Finance Council has had oversight for this area for years and has allowed this to continue, it would appear that the proverbial fox is guarding the chicken-coop. Here is the trend from 2006 to 2010.

Before the 2006 Fiscal Year, the 4 highest paid lay employees were paid a total of about $689,000:

  • Dir. of Institutional Advancement (Ken Hokenson): $ 217,089
  • Chancellor & Secretary  for Finance (David W. Smith) : $ 175,857
  • Secretary for Communications (Terry Donilon): $160,000
  • Dir. of Parish and School Services (James Walsh): $137,523
Then a new group of people joined.  Based on disclosed information (except for the new secretary for development whose salary we can only estimate right now), the highest paid employees today earning $150K+ are paid  a total of about $1,876,000–3X what it was just 4 years ago:
  • Secretary for Education (Mary Grassa O’Neill): $325,000
  • General Counsel (Beirne Lovely): $300,000
  • Chancellor and Secretary for Finance (James McDonough): $250,000
  • Secretary for Institutional Advancement (Kathleen Driscoll): salary not disclosed, but estimated at $250,000-$300,000
  • Catholic Media Secretary (Scot Landry): $250,000
  • Assoc Superintendent of Schools (James Walsh): $185,270
  • Secretary for Communications (Terry Donilon): $166,304
  • Secretary for Faith Formation and Evangelization (Janet Benestad): $150,000

Add to that the approximately $830K paid to six members of Chancellor McDonough’ s staff who earn $110K+ and we get to about $2.7M in salaries paid to 14 people.  And we are missing a few people still.

Even if we were to adjust this total for the salaries of the general counsel (because it is claimed that the in-house counsel helps save some of what was paid to former outsourced counsel, Wilson Rogers) and for the Catholic media secretary (because they are on a separate P&L from Corporation Sole and have to self-fund), we cannot avoid the reality that the archdiocese pays millions of dollars more today to their most senior people vs what they paid just 4 years ago to do basically the same job functions. (Update: our readers and other sources tell us we should not even allow that the in-house counsel is saving any money).

If the mission of the Catholic Church in Boston has not changed much in the past 4 years and the job market has been in the toilet bowl during the worst recession in decades–meaning that most people work for the same or less salary so they can keep a job-why exactly is it costing us 3X more in six-figure salaried staff to accomplish this mission than it was before?   Are these salaries all comparable to those paid for similar roles in other dioceses?  Since this has happened with the approval of the Finance Council, a reasonable person might ask, who exactly on the Finance Council and in the Archdiocese has been providing the oversight, consulting, and approval? And what will change going forward if those people are still involved?

Stay tuned tomorrow for more in our next exciting episode of  “Top 10 Ways the Finance Council is Conflicted, Self-Contradicted, or Perhaps Even Corrupted.”

24 Responses to Finance Council Top Ethical Concerns: #4: Compensation–Six Figure Salaries

  1. Objective Observer says:

    This is a long entry. Read the last paragraph first.

    In the new Finance Council Charter, the compensation committee is charged with determining appropriate compensation for all lay employees at the senior management level. There is more than one standard for comparison. Here are some points to consider:

    1. One standard of compensation determination is to look at comparably qualified individuals in other entities. This can be boiled down to, “What does a Ph.D. in education get paid?” More than a person with a bachelor’s degree in the field, more than a Master’s, but is that the stand alone question? What about experience? That should count for something.

    2. A closer look asks, “What is the scope of responsibility of the Ph.D. in education?” How many people report to the individual? Is this person the ultimate arbiter of policy for the organization? What is the responsibility/accountability for policy set by the person? To whom does the person report? How large is the entity the person oversees? How many variables shape the entity? Drill down to specifics. Is this person accountable to the stakeholders? Is there a large union involved?

    3. Another, and arguably more germane, standard is to look at compensation in comparable organizations. It’s pointless to ask what Pearson (one of the largest publishers in the world for instructive media) pays a Ph.D. in education when the RCAB schools candidate is the position under review by the RCAB Finance Council subcommittee on compensation. So the committee is compelled to look at compensation in comparable entities. Tempting as it might be, you don’t look to see what the chairman of the Education school at BC gets paid. BC is a richer and more complex entity than the RCAB schools. Like Pearson, it has a huge influx of income (tuition!) to fund its management activities.

    4. Another essential question is, “What is the compensation of the other managers in this organization?” I’m not talking about RCAB assistant superintendents — in 99% of school systems those are individuals who are highly qualified in a particular area of education or management — curriculum, testing, even transportation. In the RCAB case we would ask what the principals of the schools are paid in order to determine what the superintendent is paid. Principals are plant managers — they are on the front line dealing with teachers, students, parents, budgets and buildings. They don’t have the luxury of specializing, and neither does the superintendent of schools. The superintendents of schools cannot in an appropriate compensation determination, end up being paid more than double the highest-earning principal.

    This is not meant to exhaust the possibilities of scrutiny for compensation for a Ph.D. in education who would be considered for superintendent of the RCAB schools. It is meant to cast the question of compensation in the appropriate matrix, the way it’s done in the real world.

    As to compensation for the legal counsel, I disagree with BCI. The biggest legal bills RCAB has ever paid were for the abuse settlement and the work emanating from it. That was a super specialty. RCAB’s lawyer and his staff (highly competent) were not associated with the Rogers Law Firm. It was a huge amount of money ($1.5 million in 2003?) paid to work through the settlements. That said, it was a drop in the bucket compared to what the lawyers for the victims kept out of the settlement checks (roughly $34 million).

    There are four lawyers working full time at Brooks Drive right now (that I know of). They have well-compensated support staff. The total package has to be $1M per annum. The wheels of legal inquiry at 66 Brooks turn at an excruciatingly slow pace for many who must rely upon them. The RCAB lawyers hire outside counsel still for some of what they do. And they represent some serious conflicts of interest — they are ethically obligated not to simultaneously represent Corp Sole and its related entities. They know better and do it anyway.

    So, they cost too much, they work too slowly, they engage in conflicts that a firm would never permit, and they probably could not find work right now in a firm in Boston, as many good lawyers in town are out of work or working part-time.

    When compensation at RCAB lines up with appropriate standards, and when RCAB gets what it pays for, we can all write shorter entries.

    • Clem Kadiddlehopper says:

      The 2010 budget for central services of the Archdiocese is found here:
      http://www.bostoncatholic.org/modelimplementation.aspx
      The general counsel’s office has 3 lawyers, per the website, and its administrative costs were budgeted at $565,000 in 2010, not $1MM. If you add in their allowance to pay outside legal fees, the entire budgeted amount is $965,000.
      Certainly, there are other departments that budget for legal fees, i.e. the Professional Responsibility and Oversight office, new in this budget year, (page 10), carries a $600,000 budget for legal fees.
      The budget tells the story in overview. The 2011 version isn’t yet published on http://www.bostoncatholic.com

      • Objective Observer says:

        Clem,

        We’re on a similar page: Does RCAB pay too much for inside legal counsel?

        Lawyers: Gustavson, Lovely, O’Connor, Dunderdale

        Their salaries, staffs (Gustavson apportioned) and overhead are well in excess of $1 million (closer to $2 million). That’s before outside legal fees, budgeted for one office at $600,000.

        Ergo, as stated above, the lawyers cost too much, they work too slowly, they engage in conflicts that a firm would never permit, and they probably could not find work right now in a firm in Boston, as many very good lawyers in town are out of work or working part-time.

        Issue: What are donors getting for such a huge chunk of this year’s Catholic Appeal goal?

        Issue: Which other offices (e.g., campus ministries) are severely underfunded by Appeal proceeds? Why are they such low priorities for the chancellor?

  2. TheLastCatholicinBoston says:

    Tell me Lord is this the whore of Babylon?
    I consider myself probably the average ‘customer’
    in the diocese. I stand with Rome and believe all she holds dear. My Sacramental marriage has blessed me with a house full of wonderful children and a life companion. The Sacraments are a big part of my faith life including weekly Mass and regular confession.
    So I get it the church needs some money, we need a new roof on the church, electricity, heat, maybe a fresh coat of paint every few years. I guess it’s cool to have really wealthy people help out with stuff, I read about Mr. Connors in Boston Magazine. But Lord, do you really need an office building in Braintree? When it comes to doing your work here on earth does a PHD mean more than a GED? Help me out, your need 4 lawyers full-time? Lord when did your Church in Boston become a make-work bureaucracy?
    …cast the question of compensation in the appropriate matrix…indeed

  3. Inside66Brooks says:

    However these figures add up, it’s always important to compare them with the total goal for the diocesan-wide Catholic Appeal. That goal is currently $15 million.

    If the numbers you’ve cited here are accurate, an astonishing 18 PERCENT of the Catholic Appeal ($2.7 million of $15 million) goes to pay the salaries of just 14 people.

    The Catholic Appeal materials and video from the Cardinal suggest that the Catholic Appeal funds a huge range of ministries and provides for thousands of people in need.

    In fact, an inordinately large percentage of the money raised funds the high salaries of a very small group of people.

    Shouldn’t the Appeal materials and the Cardinal’s video explain that fact right up front?

    Of course they’d never do that, because it would mean conducting a fundraising campaign with an honest case study that allows people to make an informed choice regarding their charitable contributions.

    • Carolyn says:

      There is another way — you can restrict your gift to the Catholic Appeal so that it is used only for your intention. As an example, you can write your check to a non-corp sole but related entity like Saint John’s Seminary, and specify that it is to count as your Catholic Appeal donation. The Archdiocese then must credit your parish’s goal for that amount and give the money to Saint John’s. (I think you used to be able to do this with RCAB Catholic hospitals before those went away.)

      I have learned that a lot of corporations who match donations will not allow matching gifts to go to religions, but will allow gifts to go to educational institutions. This is how Verizon’s employee matching gift program works, and I think there must be others as well. I know several Verizon employees who write their Appeal checks to the seminary — and say it works even if you aren’t eligible through your job for matching gifts.

    • Angry Parish Council Member says:

      So, if you add up $2.4M for the six-figure salaries (exclude Lovely’s $300K from that mix) and another $2M for the lawyers (Lovely and crew plus expenses at nearly $1M, plus Dunderdale and crew plus expenses at $1M), that is around $4.4 million of the $15 million from the appeal or 29%. I definitely missed that in the fine-print of the last appeal video and materials.

  4. Sarah says:

    Mismanagement like this makes it so easy for ex-Catholics to take pot shots at the true Church they left, and it makes it so difficult for those of us who love the Church to defend its administrators. We need a shepherd who will throw the wolves out.

  5. QC Lou says:

    All comments are pertinent on the salary issue!

    Yes, you get what you pay for, BUT are ‘we’ receiving adequate value for these levels of $$?

    I don’t think so.

    The Supt. of Schools for Boston makes a lot less and has a lot more challenges I think. Maybe we could ‘hire’ her away from Mayor Tom for a ‘modest’ increase and less pain??? And not have to pay to relocate her.

  6. Vickie says:

    This is great work that you are doing! The problem with these huge salaries is that the Church is so unaccountible to the people who pay for these salaries -the laity!

    I am not from Boston but my dealing with church officials both lay and clergy is that they just don’t think they need to answer questions or even respond. (BTW this is not just a problem for Catholics). The church is really sick.

  7. Jerry says:

    when are you going to cover the millions of dollars spent to refurbish the cathedral rectory and the basement of the cathedral
    Fr. Walter Waldron and Msgr. Peter Conley lived in a poor neighborhood

  8. Michael says:

    Every single one of these people ought to be ashamed of themselves. In my opinion, they are stealing. Yes … look at it objectively … they are stealing. This is shameful whether or not they are ashamed.

  9. Brian Carney says:

    I met Mary Grassa O’Neill in person. I was not impressed. She is not only overpaid–she comes across as incompetent. This is not a personal attack. It is my experience.

    Recently, I had a meeting with her as a result of concerns parents had about the promotion of atheism, homosexuality and transgenderism at Sacred Heart School, a non-archdiocesan “catholic” school, in Kingston (nonetheless under the authority of the Cardinal). During our meeting she displayed either a complete lack of understanding of the Catholic church teaching, or possibly an arrogant disregard of the Church’s position.

    She agreed to negotiate on behalf of several concerned parents with the school to get the school to take five steps to correct the problem. She met with the school principals who essentially told her to “take a hike.” She came back from her “negotiation” empty handed. Result: not one corrective step will be taken by the school. A not so super performance by the superintendent.

    Notwithstanding several requests to have her explain her absolute failure in person, she avoided e-mails and refused to meet with us again. She only responded to e-mails after additional pressure was placed on her by the Vicar General’s office. When she finally did respond via e-mail she wrote nothing substantive — a brush-off thank you note.

    She is way overpaid from my limited experience witnessing her talents and commitment first-hand.

    • TheLastCatholicinBoston says:

      Clearly she is a carefully placed Bryan Hehir plant.

      • Inside66Brooks says:

        That is simply untrue.

      • Pastoral Center watcher says:

        The story of what is happening in Kingston is absolutely true.

        I don’t know if Grassa O’Neill is a “Bryan Hehir plant,” but she was picked by a “committee” led by Bryan Hehir’s good friend, Sr. Janet Eisner. In early Jue, Hehir celebrated a Mass for Eisner at Emmanuel to celebrate her 30 years as president of Emmanuel. Do you think they are not sufficiently connected that they never spoke about the candidates for the schools position? Cardinal Sean doesn’t make many moves without consulting Bryan Hehir.

  10. H.O.T. says:

    I find almost all of these salaries are less than but also reasonably near secular positions of equivalent responsibility in a for-profit of the size of the Archdiocese – the difference is that for-profits also usually include stock and perks and the like at this level, so salaries don’t give the whole picture about compensation.

    I can’t really speak for non-profits, although I am aware that the executive-level compensation of non-profits is much higher than usually published, and my experience is that they take more perks.

    As a mid-level, domain expert in my technical day job (I’m not even a manager at the moment), I get paid around the level of the bottom of those secretaries. I know it’s hard to believe for people who work relatively hard for $20/hr that someone who sits, types, chats on the phone, and spends most of his time thinking all day can rake down 4-5x their salary, but that’s the reality – specialized actual experience and knowledge can be leveraged to lucrative salary in the right circumstances.

    I guess I feel like O’Neill is legitimately overpaid for all her real responsibility. Scot is what I’d call “doing well for himself” but I’ve seen similar things in business in similar positions. Nobody else really jumps out at me.

    Personally, I wish all the media people in the Archdiocese did a better job than what _I_ see, but I don’t really begrudge the salaries for the position, just their particular effectiveness in it. In fact, that brings up a point: judging effectivity in some of these rarified positions is legitimately difficult. A lot of the time, you can only figure out what’s going on when someone seriously and obviously screws up – and it’s harder to do in the fuzzier positions. I doubt the Archdiocese has a person who would go around and say “This person sucks at their job – they should be made to resign and we should get someone good in.” It’s especially hard to do this when you’ve _hired_ those people and come to like them through working together, which is the reason why many boards change their executive teams (slowly) every few years.

    The sad reality of compensation packages over a certain figure (call it 100k) is that you are worth what you were paid in the last job plus between 5%-20% or sometimes much more, depending on the requirements of the new company and the number of legitimately qualified applicants. Switching companies – or even positions within the same company – in a decent economy can quickly bounce your salary up, and you rarely settle for less than you were previously paid. Only if you get caught in a layoff or get fired (or truly hate what you’re doing and are almost changing careers) do you ever take less than a previous salary voluntarily.

    I’d say – if the Archdiocese needed a legitimate computer guy (I think they do) and I were qualified (I am), I’d definitely also show up your list. But, I’m also pretty good at my job: I’d probably be able to metric that my efforts saved them as much or more money that they paid me, and made things better for everybody.

    p.s. Since I (anonymously) bragged about my salary, I’ll also anonymously brag about giving a shade less than ~10% of my take-home (post tax) weekly paycheck to the Sunday regular collection at my parish (just in the basket), which ends up being about 5% of the total weekend mass collection, and I’ve been doing it for a while now. It makes me _happy_ when there’s a second collection and I dig in and leave the Church with no money in my pocket, and nobody knows – except you all, now.🙂

  11. Vickie says:

    Dear H.O.T:

    That was why I did not grouse about salaries not knowing all the particulars … although before the religious orders were decimated maybe the same level of work could have been done for the Glory of God alone… but also the total lack of regard for the hourly workers that actually provide the funds for these salaries.

    A for profit firm will not tolerate incompetence or worse, People have to earn their pay. I do agree that some of it is just people “being nice” and not demanding accountability from colleagues. I am very careful now where within the Church I give money.

  12. therese says:

    what about the 3 new associate superintendents in the Catholic Schools Office just announced by email on Wednesday–no search not even a sham…? How much are they making?

  13. […] the second part on compensation.  If you have not yet read yesterday’s post on  Compensation: Six-Figure Salaries, do check out both the post and the insightful comments.  And for new readers, you can catch-up by […]

  14. […] the second part on compensation.  If you have not yet read yesterday’s post on  Compensation: Six-Figure Salaries, do check out both the post and the insightful comments.  And for new readers, you can catch-up by […]

  15. Jack O'Malley says:

    I don’t know how many readers this blog has for its excellently researched articles. I suspect not enough. But this information should be disseminated widely in the parishes of the Archdiocese. For example, in the pews before the novus ordo services on Sunday (formerly known as the “Lord’s Day”, now the “I’m OK you’re OK and let’s shake hands on it” day). Would there be a groundswell of protest or just the deafening silence of indifference?

    Turn off the faucet and let Mary O’Neill and her ilk go thirsty. Is it just me or does this cabal of corpulent, avaricious, slothful apparatchiks seem personifications of the deadly sins? They ought to be assigned a lengthy and very public penance. I’d even kick in half a buck to the collection for the sackcloth and ashes but not for the Weight Watchers’ fees.

    I’d also be willing to print up a list of about, say, 95 of BCI’s theses and nail ’em to the door of Holy Cross Cathedral. Maybe someone can help with the Spanish and Kreyol translations?. I’ll send the German version special delivery to O’Malley to remind him of how and where he was formed and that the closing of Holy Trinity German Church is neither forgotten nor forgiven.

    This post and most of the replies convince me once again of the wisdom of the first two clauses of my by now well-worn dictum. The last has been indisputable since Vatican 2:

    Don’t trust them with your money; don’t trust them with your children; don’t trust them with your soul.

  16. […] the Chancellor, and #2 Term of Service, and #3 Conflicts of Interest. Then you may want to recap on #4: Compensation–Six Figure Salaries, and Compensation: Mary Grassa O’Neill.  Today we discuss in more […]

  17. […] Other examples can be found in our March blog posts, Reducing Salaries and Finance Council Top Ethical Concerns: #4: Compensation–Six Figure Salaries. […]

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