Amy's Robot

Public money double standard

Today we heard that a group of Senators in the Finance Committee (all Republicans, btw) are concerned about the total compensation that the CEO of Boys & Girls Clubs Roxanne Spillett receives, which when you add up her salary, benefits, bonus, and payments into her retirement fund, is almost $1 million. The Senate is considering renewing a grant to Boys & Girls Clubs of $425 million over five years, but until the organization answers questions about the CEO's salary and their high travel budget, these Senators say they're not making any grant.

You probably know that Boys & Girls Clubs of America runs local centers for kids in cities all over the country. They do mentoring and after-school education programs for kids, mostly in poor neighborhoods. Their annual budget is over $100 million, and in 2007 they were the 7th biggest nonprofit organization in the country.

The Senators are concerned that this million dollar compensation for a CEO is too high, because she is the CEO of a charitable organization that receives public funds for about 40% of its budget.

This makes me want to spit. I don't necessarily think the CEO of a nonprofit should make $1 million a year (Roxanne Spillett's actual salary is $360,000) and I bet that the Clubs' staff who work directly with youth probably get unfairly low pay, like almost everyone in the nonprofit sector does. But this congressional scrutiny is based on an unspoken assumption that people who work for nonprofits should not be well compensated for their work. Like the sense of well-being they get from helping people should be adequate justification for a meager salary. Especially when some of that salary is paid for with public funds.

This is crap. Let's look at another big recipient of public support: Lockheed Martin. Lockheed is the world's largest defense contractor, and 85% of its income comes from the US government, i.e. public money.

Last year, Lockheed's CEO Robert Stevens' salary actually fell by 10%, due to government spending cutbacks and everything that was happening with the economy. So that reduced his compensation to $20 million. TWENTY MILLION DOLLARS. 85% of which is paid for by US taxpayers.

Lockheed is a much larger organization than Boys & Girls Clubs; it had $43 billion in revenue last year. The Washington Post said some people saw Lockheed's top salaries as "insensitive" during last year's financial crises.

When our government gets suspicious of generous executive compensation and questions travel budgets and benefits packages, and they go after the $1 million compensation of the head of one of the largest nonprofits in the country that helps 4.8 million kids a year, but don't think twice about the $20 million salary of the head of a weapons manufacturer that US taxpayers are funding, it drives me up the wall.

Another thing: Lockheed Martin is a publicly traded company. That means most of the shareholders' income essentially comes from US taxpayers, too. Apparently our government thinks it's OK for shareholders and executives to get rich using the public's money, but only if those people are making weapons. Not if they're helping kids.

Roxanne Spillett, I bet you earn every penny.

categories: Economics, Politics, Work
posted by amy at 1:34 PM | #