Questionable Composition of Compensation Committee

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.

Not really.

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?

21 Responses to Questionable Composition of Compensation Committee

  1. Gerald Brent says:

    The Braintree office payroll is out of control. The civilians are just doing whatever they want. There are employees of parishes and Catholic school teachers that have not had a raise in years–some in as many as 4 years while high paid staff continue to be hired. The school office with its million dollar payroll is an example. And they want me to donate to the Cardinal’s Appeal—something is wrong with this picture. I donate so that more “suits” can be hired in Braintree? I don’t think so.

    • Dianne says:

      My spouse has worked for the archdiocese on and off for the last 30 years. Some of time full time and some part time. Has been treated shabily most times by different Pastors. (No one watching the store) Has had benefits discontinued and when our children were small we wanted to send them to Catholic schools and there was no cost break in the offering. Will I give to church on sunday or the appeal I don’t think so! Not one penny of my money will ever go the church and hasn’t for a very long time.

  2. Angry parish council member says:

    Yet another mind-boggling decision! A committee led by high-paid executives is going to review the compensation for a bunch of other high-paid executives. Why even waste the time and money? THey’ll just rubber-stamp the status quo or recommend paying even more. What a waste!

  3. DBP says:

    Hey, has anyone besides me noticed that Cardinal O’Malley never makes decisions himself, or takes responsibility for governance? He only forms committees or delegates responsibility for the decision to other subsidiary groups.

    It’s a great way to stay “in charge” without taking any heat for decisions, one way or the other.

    • Mack says:

      Yes, and this shows that delegation without oversight can lead to disaster.

      • Hoodwinked priest says:

        “Delegation without oversight” is better described as complete abdication of responsibility by Cardinal O’Malley.

  4. rocky says:

    I can’t see paying 325k for the head of the Boston Catholic schools….what does she do for that money ?? she has no union contracts to deal with…..who came up with this figure??

    • Michael says:

      What do you mean she doesn’t do anything? She gives wonderful tours of the Chapel at 66 brooks drive in Braintree.

      You know the one I’m talking about. The one built essentially as a monument to CLOSED CATHOLIC CHURCHES! They don’t even see the irony in having a monument to CLOSED CATHOLIC CHURCHES! They are proud that this was designed by Cardinal O’Malley. No kidding. He came up with the idea of having the several stained glass windows in the chapel come from several different CLOSED CATHOLIC CHURCHES!

      They erected a monument to the monumental failure of the Archdiocese of Boston (a monument to the end of the Church in Boston) and they can’t even see how shameful it is.

      Everyone up their is too busy gazing at the size of their paycheck instead of evangelizing.

  5. Gerald Brent says:

    The 325K super of Catholic schools does do something–she closes schools{see St Marys in Lawrence.] Maybe she could erect a monument to the schools that she has closed in the offices of the million dollar payroll in Braintree. The signs on the wall from the closed schools would work.

  6. rocky says:

    I hope every Catholic school teacher understands that their boss makes 325k a year…keep that in mind when you go into the pastor’s office and ask for a 1 per cent raise for the next school year.

  7. Church Mouse says:

    It is not just RCAB’s Superintendent of Schools who is handsomely paid,but a good number of her staffers (5 area or associate superintendents on staff). This is true of a number of positions at the chancery and has been cited in numerous BCI blog entries. If one turned one’s attention to the “Secretary for Institutional Advancement/Chief Development Officer” Kathleen Driscoll and others who report to her for example at the Campaign for Catholic Schools, Vice President of Development Mary Flynn Myers and Associate Vice President of Development Patricia Kelleher Bartram, (development colleagues in the 90’s at the Worcester Foundation for for Biomedical Research, and arrived at RCAB from development positions at Brigham and Womens (MFM) and U Mass Medical (PKB), I would imagine they’re earning big salaries to match their titles.
    For the most part the salaries of those who are principals or teachers in the Archdiocese are low and not competitive with non parochial schools. Those who would be principals and teachers in (re) configured schools were promised that salaries would be raised and more in line with non parochial schools. The CSO provides salary guidelines to schools, interesting how one can justify the disparity between what some CSO staffers earn and those who are in the trenches.

  8. Church Mouse says:

    As for what the staff at the Catholic School Office (CSO) does, more importantly what are their accomplishments look at information on the website, their facebook page and be the judge. I gleaned the following:

    1 superintendent of schools, 3 Area superintendents (As of April 12, 2011 Brendan Kennealey one of the assistant superintendents has been named principal of Salesianum School, Wilmington, Delaware), 2 associate superintendents .

    In 12/10 RCAB press release re appointment of three Area Superintendent positions noted that “One of the Area Superintendent positions has been generously funded by the Catholic Schools Foundation (CSF). Raising money to assist the CSO is a new direction for CSF, not noted on its website.

    The current superintendent of schools was a member of the first search committee for a new superintendent of schools after resignation of Kathleen Carr CSJ. in 2007. The first search was unsuccessful, a second search initiated and current superintendent of schools selected. One assistant and one associate superintendent and the current superintendent of schools were associated with Harvard Graduate School of Education prior to their appointment to CSO. The other associate superintendent worked at the chancery, and was part of Kathleen Driscoll’s (Jack Connor’s) team to establish Trinity Catholic Academy in Brockton and later Pope John Paul 11 Academy.

    The December 2010 announcement of the appointment of three assistant superintendant positions stated that these individuals “will support the strategic vision of the Cardinal and Secretary of Education reinvigorating Catholic education in the Archdiocese of Boston”.
    Later in the same announcement:
    “The CSO is dedicated to developing and supporting a system of schools that provide:
    1. Strong Catholic faith formation and gospel values, fulfilling the mission of the Church;
    2. Excellent academic programs that equal or exceed the performance of “competing” educational sources;
    3. A viable and sustainable financial model that is driven by increased enrollments.”

    Checking out Catholic Schools Office new external website at http://www.catholicschoolsboston.org/
    Main page tags reads “A private education at affordable prices….Smart students, great kids, #1 above not mentioned
    •states on Mission page – “Our Catholic schools offer an education that combines academic excellence and Catholic faith formation”
    on Academics Prek-12 Page –“Our Catholic schools offer an education that weaves together academic excellence and Catholic faith formation”

    Interesting that language contained in RCAB Catholic Schools Admission Policy PDF on this website does not appear prominently on the website “The goal of our Catholic Schools is to present Catholic faith and Catholic teaching to our students in a rigorous academic, spiritual and moral education program. Catholic school students strive for high academic achievement, are taught to love and worship God, and live the Gospel teachings. Catholic school students work together, build community and give service to others.”

    CSO page on RCAB’s website indicates office supported by a staff of 10 including 6 superintendent positions and that each area superintendent is responsible for 40 schools. Elsewhere on the website states the number of students in Catholic schools in the archdiocese is 42,000 (on new website 43,000.) in 124 schools. However there may not be 124 schools under their supervision since the list of schools in the directory on the website include high schools which are run independently. This would seem to indicate that there is a lesser number of students served by CSO.

    The schools under CSO include those schools (re)configured through the Campaign for Catholic Schools e.g. Trinity Catholic Academy, Brockton, Pope John Paul 11 Catholic Academy, Dorchester/Mattapan and Lawrence Catholic Academy.
    Both Trinity Catholic and Pope John Paul 11 Academies have Regional Directors with a support staff in addition to principals in each of the sites associated with them. (It is not clear whether there will be the same structure for Lawrence Catholic Academy, another project of the Campaign for Catholic Schools, doesn’t appear so for South Boston Catholic Academy and Quincy Catholic Academy)
    The Regional Directors seem to fufill the same function in the Academies as the CSO’s 3 area superintendents do. Thus there are additional supervisors in addition to the 5 located at the CSO. What’s the salary of the Regional Directors? Their salaries plus the cost of their support staff adds to the already high costs associated with the CSO.

    Prior to the current superintendent of schools assuming her position in the summer of 2008 the acting superintendent of schools and her predecessor, assistant/ associate superintendents were Religious Sisters, whose salaries were stipends (between $30,000 and $40,000) no where near the salaries of those who currently hold such positions

    Lastly on CSO external website:
    Under Mission:
    A major part of our mission is finding new approaches to organize, fund and manage Catholic education across the Archdiocese. We work with school leaders to implement new and viable models for Catholic education.

    The jury is out on whether the new models will be financially sustainable. Catholic education in the RCAB could become a dinosaur,

    In more suburban areas of the Archdiocese where public schools are good, why choose to pay for education, when there is no difference between the public school and the parochial school given the lessening focus on Catholic Faith Formation –Catholic Identity.

    In inner city neighborhoods of the Archdiocese people choose Catholic schools as an alternative to public schools only as long as they can afford it and there are no alternatives in the form of charter schools.

  9. "Just Wondering" says:

    Great article! Great responses! In fact, deeply disturbing responses!! But I’m “JUST WONDERING!!!???”why not one person picked up on your excellent suggestion re A. J. Sorrentino and his excellent comments and/or suggestions. I would be happy to vote for AJ if his name was put on a suggested ballot. But “JUST WONDERING” as I am, it will never happen under this regime. I think it’s time to invest in a good vacuum cleaner.

  10. Little Red Hen says:

    A comment and a question: the goings-on at the Catholic Schools Office provide a steady supply of material for another blog — and why is it that whenever Jack Connors becomes involved with a Catholic school, it turns into an “academy”?

    • Al says:

      ” Academy” is the new in name for schools. If you notice so many of The Boston Public Schools are now called “academy” such as Dorchester Academy, Social Justice Academy, Community Academy of Science and Health and the list goes on.

    • Church Mouse says:

      It may also be a pr attempt to enhance the illusion that something brand new has been created and shift attention from the fact that the new entity was created from combining schools (which involves a school or schools closing) and some unhappy constituents.

  11. Church Mouse says:

    A.J. Constantino’s comments are right on. RCAB observers might with justification assume that his comments will be ignored.

    In 2005 The National Leadership Roundtable on Church Management http://www.theleadershiproundtable.org/ was formed “to offer ideas to assist the Catholic Church in the US….to bring together members of the Church hierarchy with leaders from the religious, corporate and non-profit worlds to discuss ways to strengthen the management, financial structure, and human resources of the Catholic Church in the US…..The goal is a Church that is stronger in the areas of management, finance and human resources and that more fully utilizes the talents and skills of all of the faithful”.
    Rev. J. Bryan. Hehir and Rev. J. Donald Monan SJ are currently among the organization’s Board of Directors”.
    In April of 2009 Kerry Robinson, Executive Director of this organization spoke at Emmanuel College (Sr. Janet Eisner SND). http://www.emmanuel.edu/About_Emmanuel/News_and_Events/News/News_Articles/Kerry_Robinson.html
    In the RCAB one might say that the worst business practices are in control. As someone greatly admired says the “Corporation Sole” has become the “Corporation without a Soul”

    • Carolyn says:

      This is somewhat off topic, but its genesis is the recent vigorous reinforcement generated from Braintree for the notion of the utter abdication of the ordinary’s sacred trust to the People of God.

      Over the past three days, in matters unrelated to Catholic schools or compensation, I have become more discouraged than ever about Cardinal Sean O’Malley’s ability to ever lead the Archdiocese of Boston. He is what my Irish grandmother from Dingle would call a “patsy,” but a willing patsy. (Apologies to all people named Patsy!)

      Our strongest pastors and their strongest parishioners hold the key… can they finally bond together and take on the challenge of righting this ship? At least, can they bond together within their regions and get something done? Can they insist on some form of effective oversight? Some true accountability? Some audit function that cleanses the central administration of conflict of interest and wasting of assets? Those pastors and their strongest parishioners are the answer — the only answer.

      And as for those who have wrought this travesty:

      If you graduated from college in, say, 1958, or 1962, or even 1963, and style yourself a liberal lion, maybe it’s time to let go of your 1968 folk Mass, VietNam protest agenda and take a backseat. You are not the future of the Church. For that matter, you are not its past. You are simply not of interest to those who actually go to Mass, support their parishes and see their children enter service (apostolic, hands on service). The real social justice work of the Church gets done by these people, not by your campus-bound natterers.

      Nor are you of interest to the many, many priests, religious men and women, and married people, who live the vowed life the way it was meant to be lived, and long for true leadership in their particular Church.

      You are not liberal lions, you are a mutual admiration society completely out of touch with the people in the pews, and the people in formation. So continue to live in your handsome houses in your affluent neighborhoods (e.g., Chestnut Hill and Wellesley), keep on flying in Business Class, and continue to surround yourselves with those steeped in cash and DNC connections.

      But don’t, whatever you do, think anyone who actually lives a prayer life and puts their cash in the collection, gives a whit for what you think or what you do. You are takers, marked by avarice cloaked in “aw shucks” insouciance — takers of real estate, takers of opportunity and takers of trust.

      You are like characters in a Dickens novel — rosey-nosed and robustly impressed with your own sense of importance. The Dickensian irony comes from the fact that those who really, truly form the pillars of the Church in 2011, don’t even know who you are.

      • A Priest says:

        Carolyn, I couldn’t have expressed my views on this any better than you just did…Bravo! Bravo! I wish more people felt this way.

  12. […] and Conflicted? for the first example.  Needless to say, as we blogged about last Friday in “Questionable Composition of Compensation Committee,” BCI does not think the concept of a Compensation Committee is the right solution to the […]

  13. […] Council would form a compensation committee. Then it took another 6 months to release a roster of who would be on the committee, and then we found the committee to review excessive compensation of lay executives is being led by […]

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