We wanted to wrap-up this week with more of the myths and misconceptions about BCI, but are preempting that post to share the latest from the archdiocese regarding the new Finance Council Compensation Committee, whose membership was finally posted this week.
A key goal of the committee is to review the six-figure compensation of lay cabinet executives–several of whom are multi-millionaires–and a quick glance at the first two names listed on the Compensation Committee membership list reveals that they themselves are multi-millionaire businessmen.
The first thing that came to mind after learning this was the Homer Simpson catchphrase, “”D’oh!”
As most people know by now, the Archdiocese of Boston pays certain lay executives six-figure salaries that are objectively excessive for the Catholic Church to be paying.
We know they are objectively excessive because we contacted several other archdioceses and asked them how Boston lay executive salaries compared to what they were paying. We also looked at salaries for roughly comparable private sector jobs in the case of the superintendent of schools, who is paid $325,000 in the Boston Archdiocese. With 1/3 of parishes in the red, parishes being “taxed” to pay Central Ministries expenses, the Catholic Appeal down $1.5M from the prior year, and lay and clergy pension plans underfunded by hundreds of millions of dollars, a reasonable person would think the archdiocese would work hard to contain salary expenses.
Whether it was due to prodding by BCI or it was going to happen on its own, the Finance Council voted on November 4, 2010 to form a “Compensation Committee” to review lay executive compensation. We did not think it was such a great idea at the time, as discussed in our December 9 post, Finance Council Top Ethical Concerns: #4: Compensation Committee. It makes the Finance Council even more into something analogous to a corporate “Board of Directors” (which it is not) and the archdiocese should just conduct sound management and compensation practices as a matter of course, benchmarking against other dioceses as was done in the past.
In looking at the membership of the new committee and what we know of their plans, it appears that a lot of the concerns we raised back in December in Finance Council Top Ethical Concerns: #4: Compensation Committee have been ignored, and for the sake of the success of this effort, we hope the archdiocese reconsiders and makes adjustments.
Based on an Ethicspoint response that reader, “Mary” forwarded to us suggesting the committee was getting ready to roll, we went to the publicly accessible Finance Council page and noted the membership of the Compensation Committee:
- Paul W. Sandman, Esquire, Chair; Board of Directors, PDL BioPharma
- Brian Concannon; President and CEO, Haemonetics Corporation
- John H. McCarthy, CPA, Vice Chair; Senior Vice-President for Administration and Finance, Northeastern University
- Reverend Michael Drea, Pastor, St. Paul Parish, Cambridge
- Reverend Jim Ronan Pastor, St. Mary – St. Catherine of Siena Parish, Boston
- Mary L. Ryan; CEO, Thompson Steel Company
- Leo Sullivan; Vice President of Human Resources, Boston College
In our December post, we suggested that an effort to review compensation would be best “led by someone whose own annual compensation is closer to the level that people who work full-time for the Catholic Church are paid.” A simple Google search on the first two names revealed that both are multi-millionaires.
- Paul Sandman: Forbes reports that in his present role as Chair of the Board of PDL BioPharma, he is paid $166,000. In his prior role as Senior Vice President and General Counsel at Boston Scientific, the 2003 proxy (found here) reports that his 2003 salary and bonus totaled $740,000. The 2003 proxy reports that he also held 540,060 shares of stock, whose value at the time based on the stock price of $32/share was approximately $17.5 million. This shareholder lawsuit filed against Boston Scientific which was dismissed said that during the period covered by the class action, Sandman sold over 54% of the equity he held in Boston Scientific securities…generating more than $24 million from these transactions.”
- Brian Concannon: Forbes reports that in his present role as President and CEO of Haemonetics, his 2010 compensation (salary, bonus, stock) was $3.2 million.
BCI does not begrudge people for their success and for earning a lot of money. But for an effort intended to determine if lay executives making $150K-$325K/year are overpaid, having multi-millionaires assessing the compensation of other multi-millionaires gives the appearance of the “fox guarding the chicken coop.” Is it not possible to find people for the committee who themselves are not CEOs who have been paid millions of dollars a year? Well intentioned as they may be, how can these corporate CEOs and executives, themselves highly compensated, not have a bias towards the corporate strategy of paying whatever it takes to recruit top talent, which is very different from a public charity or Church-oriented strategy of recruiting competent, qualified people who believe strongly in the mission of the Catholic Church and will work for what the Church can afford to pay them? Why not include an HR person from another Northeast diocese such as Fall River, Hartford or New York on the committee? Why not have one or two Catholic HR people from the private sector on the committee? Why not include someone like Deacon A.J. Constantino, whose insightful comments here should have made him an obvious candidate for the committee?
In our December post, we also suggested that placing Jack McCarthy on the committee could create what appears to be a conflict of interest:
Jack McCarthy is already head of the Steering Committee and, coincidentally, just so happens to be the next-door neighbor in Hingham to the newly-hired Development Chief, so he has a perceived conflict of interest if her compensation is to be reviewed. (He was also a member of the “sham search” committee that was never allowed to interview candidates).
BCI has sent a number of emails to Jack McCarthy regarding the deception and ethical corruption in the Boston Archdiocese and he has never responded.
Regarding the other members of the committee, we are not ignoring the names or saying there is anything problematic with their membership.We are not making personal judgments about the people on the committee. We are simply saying the first few names on the list caught our attention, and create a perception that the committee is likely to fail before it has even started.
We close today with an excerpt from A.J. Constantino’s comments on our December post:
Let’s get to basics, each “lay executive employee “should be clearly defined by a Job Description; Objectives, Accountabilities and Measurements.
Human Resources should be developing the Job Description with the hiring manager; while the objectives, accountabilities and measurements should be set by the manager and the employee and placed on file with HR.
The question is does the RCAB have these “Standard Operating Procedures” in place?
Next: there are countless FREE resources available to develop compensation packages =- it’s not a mystery!
I have worked in several large companies, where the Presidents/CEOS have been anxious to use outside consultants, after paying large fees, we most often learned that no one knows our business better than we did and in the end “self-determination” was best.
From the “outside looking in”, it appears that “lay executive employee” salaries are disporportionate to the overall RCAB budget…
For those who may be bit put off my analysis, it’s a business world prospective, NOT a Church world perspective. In my opinion, a $100K-$150K salary for a “lay executive employee “ for the RCAB is just–with, once again, in my opinion, one exception, “in house” Legal Counsel.
BCI recognizes the Archdiocese for taking some steps to address the compensation problem. But we think the Compensation Committee concept, though no doubt well-intentioned, is not the right way to solve this problem. Apparently, they are also now off to hire an expensive outside consultant as BCI and A.J. cautioned against. As described above and in our December post, there are better, less expensive ways to solve this problem.
What do you think?