Reducing Salaries

Headlines in the Boston Globe Sunday said, “Patrick takes aim at agency salaries: Hefty payrolls at state’s independent bodies attract new scrutiny.”  The governor’s secretary of housing and economic development, said Patrick is reviewing salaries…at the state’s 42 independent agencies and will reduce those he believes are excessive.

Meanwhile, at the Pastoral Center at 66 Brooks Drive, has anyone heard any moves from the leadership of the archdiocese about reducing excessive salaries doled out over the course of the past six years?  Nope.  Nearly 4 months after the Finance Council amended their Charter to create a Compensation Committee, they have not even published the names of the committee members on the Finance Council website.

Beyond that, this weekend the new development “dream team”–you know, the “transparent and accountable” team that missed their most recent two major goals but will not let anyone know the results–will launch the annual Catholic Appeal for 2011.  There will be a video from Cardinal Sean played at every parish recounting yet again how much the archdiocese needs your contributions to support critical ministries, while at the same time no one at 66  Brooks Drive cares to deal with the small matter of dumping more than $1M of your contributions down the drain annually on excessive six-figures. 

Former employees just received letters telling by exactly how much their pension benefits has been slashed because the archdiocese does not have enough money to fund the plan, but no one has the intestinal fortitude to do anything about the excessive salaries, where savings could have made the pension cuts less severe.

In case people have forgotten some of the most egregious examples, we highlight them once again for you, and how just adjusting the salaries of 5 of the six-figure salaried staff saves a cool half million dollars:

Carol Gustavson, Pension/Medical Plan Trust Administrator.  Was making somewhere in the range of $125K to more like about $150K before her job as Executive Director of HR was reduced by about 2/3, and we believe she is still making that. Other archdioceses we surveyed said they were not paying their head of HR nearly what Carol was making when she was responsible for HR.  Now, Jim DiFrancesco is “Director of Human Resources” and Carol is only responsible for the Pension/Medical Trust (minus most of the work of dealing with plans for 10,000 Caritas Christi employees who now mostly Steward’s responsibility).  Oh yeah, Carol is also responsible for the incredibly taxing jobs of coordinating the phone system and Pastoral Center floor plan. A pension/medical plan administrator for an archdiocese like Boston makes around $80-85K.  Annual salary savings: $70,000.

Terry Donilon, Communications Secretary.  Currently makes $166,304.  By means of comparison, sources indicate that the lay communications secretary who preceded Terry–and who was actually good with spelling and grammar–started at about $100K and was making $115K when she left.  But of course, she was not hired for the archdiocesan job by Ann Carter at Rasky Baerlein through Donilon family political connections like Terry was.  Coincidentally, BCI just happened to be looking at what the State of Massachusetts pays for communications staff in a similar role.  According to this “Your Tax Dollars at Work” listing, Gov. Deval Patrick’s former communications director and press secretary, Kyle Sullivan was paid $97,850/year in 2009 to communicate information for the Governor of a state with an estimated population of 6.6 million people and a budget of about $27 billion.  Terry is paid to communicate information for an archdiocese of about 300,000 Church-going Catholics and 2 million total Catholics with a $34M Central Ministries budget.  Regardless of how you do the math, the person in his role should be making no more than $115K.  Annual salary savings: $50,000.

Jim McDonough, Chancellor.  Currently makes $250,000. The former CEO of Abington Bank, he held 244,665 shares or 6.28% of the stock when it was sold to Seacoast for $139.4 million in June of 2004, making his stock at the time worth nearly $9 million.  Needless to say, when he took the job, he said he was “very blessed and didn’t need a job.”  If he didn’t need a job, why has he soaked the cash-poor archdiocese for nearly $1.25M in salary since 2006? If top lay administrators were capped at $150,000 in this archdiocese, the annual salary savings would be $100,000.

Beirne Lovely, General Counsel: Currently makes $300,000This is basically a post-retirement job for the 65-year-old attorney, after he spent 32 years at the national law firm Goodwin Procter LLP, most recently as senior partner. If top lay administrators were capped at $150,000 in this archdiocese, the annual salary savings would be $150,000.

Mary Grassa O’Neill, Secretary for Education.  Currently makes $325,000 from the archdiocese, on top of a state teachers’s pension worth at least $75,000 annually. We have covered her excessive six-figure salary already. No other Catholic archdiocese pays at her level.  Much larger public school systems in Boston, New York, Chicago,  and Los Angeles that serve as much as 10X to 25X the number of students pay their top administrators less. In her last superintendent job running the Milton Public Schools, her annual compensation was $138,000.  With a lay administrator salary cap at $150,000, the annual salary savings would be $175,000.

There is much more to be saved in excessive salaries, as we covered previously in “How to Save $2 Million Annually Without Really Trying: Part 1”  This is just five people or many making excessive compensation relative to other archdioceses. No established goals, metrics for success, or accountabilities.  Salary savings alone for these 5 people/roles would be $550,000.  We have raised concerns in “Is Boston Archdiocese Violating the Law?” and many other posts.  Apparently neither the Cardinal nor the Finance Council, who are canonically charged with ensuring the temporal goods and assets of the archdiocese are well cared for, cares about this.

Since those charged with caring for archdiocesan assets are not caring for them, Catholics need to complain even more to their pastors, and pastors need to complain at vicariate meetings and at the Presbyteral Council and withhold contributions from the archdiocese.  We hate to say this, but Catholics probably also need to make a stink about this to the Holy See and to the government agencies charged with overseeing non-profits.

Much as BCI has to criticize about Massachusetts Gov. Deval Patrick, at least he is making public statements and efforts to cut excessive salaries.  He cut his pay and legislative salaries by 5% in January in view of the state budget situation and ongoing recession. Now he is going after excessive salaries in other agencies.

In the Archdiocese, what are they doing?  Nothing. 

After you hear the video from the Cardinal this weekend asking for money, chat with your pastor and let him know you are not going to give to the appeal, and tell him why.

Have we missed anything?

14 Responses to Reducing Salaries

  1. Former Employee says:

    While I agree with much of the math, an arbitrary cap might be a little difficult given the competition etal, but since there does not seem to be competition fot the jobs, heck a cap is fine.

    I would like to note, one thing is overlooked.

    Savings on these salaries could be redirected either towards refund the lay employee plan quickly over the short term and/or increase the salaries of the lowest level employees.

    I mention the lowest level employees because even while I was there they always seemed to have the most dedication to the Church and were truly there for the right reason, while at the same time many often lived on a shoe string budget.

    • Carolyn says:

      Governor Cuomo thought a cap wasn’t arbitrary. In today’s New York Times… http://www.nytimes.com/2011/03/01/nyregion/01superintendent.html?_r=1&adxnnl=1&hpw=&adxnnlx=1299005939-9iFf92VKrcvBqEmLB4vd7w

      As you may recall, the Cuomo legacy is not exactly tight-fisted.

      So if New York state, and New Jersey, and the other states listed have capped Superintendent of Schools’ salaries, why not RCAB? I like the $150K number — I promise you can find highly qualified people in all the jobs BCI has listed, who would accept $150K.

      Other dioceses pay nowhere near what Boston does for any of these positions. And how about the ones we don’t know? John Straub? Fran O’Connor? Carol Gustavson? Is it possible that any of them is paid more than $150K/year?

  2. Anonymous says:

    BCI

    In the article, you make reference to a letter sent to former Archdiocesan employees about pension benefits. You state that the letter tells the former employees how much their benefits are being cut. Do you have the facts to support this cut?

    • Yes. We wrote about the freezing of the lay pension plan previously:

      https://bostoncatholicinsider.wordpress.com/2010/12/15/lay-pension-plan-can-you-trust-the-anonymous-trustees/

      https://bostoncatholicinsider.wordpress.com/2010/12/16/lay-pension-plan-part-2/

      Former employees who were vested in the pension plan tell us they have received letters letting them know what the lump-sump payment will be vs an annuity payment, including a reduction to account for the underfunding of the plan. We will discuss that further in a subsequent post.

    • Underpaid Ex-Teacher-Pensioner says:

      I’m sure BCI has the facts straight.
      As a former parochial school teacher, I made about $25,000 a year. I certainly wasn’t in that job for the money, but for the chance to pass along the Catholic faith to my students.
      I just received the letter from Carol Gustavson telling me to choose:
      a. Either to take 83% of my accrued pension benefits now (decide by April 30) as either a lump sum or a monthly pension
      OR
      b. Leave the money with the Archdiocese until I reach retirement age and hope the pension plan is not further in the red then.
      Given the current outlook for the way Archdiocesan finances are being spent, I think I’ll cut my losses while I can!

    • Objective Observer says:

      My paperwork says the number currently is 79% as the discounted amount, and then the amount will be discounted by the present value of the money.

      Ouch.

      Lump sums are not a good idea for the employee in general. But they are a great idea for the employer.

      Lady MacBeth went in for washing her hands of problems, too.

  3. current employee says:

    In your latest post you mention three new regional superintendents hired to help MGO’N.
    Who are they and how much are they being paid?

    Are there any other positions available? I’m nearing retirement and can’t figure out how to survive on my measly pension!

    • Former Employee says:

      I remember they dumped the COL in 2001 or 2002ish and I don’t think they ever restoried it, I would hope that they consider restoring it once they find a way to fully fund it.

      So many people stay there for years out of loyalty to the Church they deserve something.

  4. Claire Brassil says:

    The February issue of “Culture Wars” magazine offered the following: ” Cheating the Worker”..”The Boston Archdiocese is freezing its lay employees’ pension plan to switch to c 401(k)-style plan. It’s letting those over 55 cash out at a loss. The more who do, the faster and cheaper the archdiocese gets out of its obligations. “It’s a voluntary choice,” says Carol Gustavson, archdiocesan HR head. “It’s really ugly, trying to get people to make bad financial decisions to save the Catholic Church some funding.”
    says Drexel law Prof. Norman Stein, who notes the law bars corporations, but not churches, from discounting lump-sum payouts to reflect under funding of a pension plan. (James G. Bruen, Jr., “Bullets”, Page 48)

  5. […] Reducing Salaries – Boston Catholic Insider […]

  6. Dave says:

    While we are at it, lets demand 17% of salaries paid them to date back. Thats what they want to do to the pensions of those who worked for sub market wages in service to the Church. We can put our refund into the pension plan.

  7. Fr B says:

    I WISH WE HAD THE SERVICES OF A TEAM OF TRUSTED FORENSIC ACCOUNTANTS TO REVIEW NOT ONLY THE RCAB BUT ALSO THE NATIONAL AND LOCAL CATHOLIC CHARITIES FUND{ AN INTERNATIONAL FINANCIAL ORGAIZATION …
    I AM HAPPY THAT ALL OF YOU AT BCI CONTINUE TO FORGE AHEAD … I PRAY FOR YOUR CONTINUED SERVICE TO THE PEOPLE OF GOD !

    • Carolyn says:

      Amen, Father B, Amen. A forensic audit, including an audit of the 1040s of certain key players, would either find a lot of hijinks, or be completely reassuring.

  8. […] to the Archbishop of Boston, Cardinal Sean O’Malley.  But, the situation we mentioned in our last post–about how Massachusetts Gov. Deval Patrick is moving to lower excessive salaries for a number […]

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