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Mistake at DIA: A Pay-Raise Ruckus And A Solution

In the last two years or so, I’ve often praised the Detroit Institute of Arts for conducting itself in the right way–with respect to passing the millage and in how it has handled itself during the city’s bankruptcy. Now, though, it has made a major mistake–in terms of optics if not substance.

GargaroAnd it may cost the museum big, in terms of local support. Some local legislators are threatening to take action.

According to several reports, the board handed out big raises to the top two execs in 2012: Director Graham Beal received a 13% raise in total compensation to $514,000, including a $50,000 bonus, and COO Annmarie Erickson saw her pay rise 36% to $369,000, including the same bonus.

Both undoubtedly worked hard: 2012 was the year they campaigned hard to persuade voters in three Detroit counties to tax themselves a tiny bit, about $15 a year on every $150,000 of a home’s fair-market value, for 10 years and hand over what would amount to $23 million a year to the DIA for operations. In return, residents received free admission to the permanent collection galleries. As I wrote then, in an article for The Wall Street Journal,

In recent months Graham Beal has been working all but nonstop, speaking at community breakfasts and Rotary Club lunches, appearing at city council meetings, county hearings and fund-raising events, doing media interviews, conferring with political strategists. “I have not yet kissed any babies,” he says, with a slight chuckle that turns into a sigh.

So did he and Erickson deserve a raise? Probably–at least the bonus.

Detroit didn’t declare bankruptcy until July, 2013, but the  DIA board must have seen a crisis coming in some manifestation. Now, when pensioners and Detroit’s creditors are all taking haircuts, the action of trustees, no matter how well-meaning, looks off-key and out of line.

As the Detroit News reported:

Oakland County Commissioner Dave Woodward, D-Royal Oak, said he spoke Friday with Gene Gargaro (pictured), chair of the DIA compensation committee, and asked him to either have the money returned or put measures in place to ensure this does not happen again.

If nothing happens, Woodward said, he would take steps to dissolve the Oakland County Arts Authority that collects the voter approved $11 million annually for the DIA.

“The DIA must act now to acknowledge the mistake, apologize and fix it,” Woodward said. “Otherwise, I’m prepared to do whatever it takes to see that no further Oakland County monies go to it.”

Asked for comment Monday, Gargaro confirmed he spoke with Woodward on Friday and told The News: “I need time to consider what Dave and I discussed … when I have something meaningful, I will share it with you.”

Another lawmaker, Eileen Kowall, also said she’s talking to the DIA board of directors in hopes that they will reconsider.

Kowall, the Detroit Free Press reported, “…said she has gone to bat for the museum in the past, supporting legislation to ensure money from the millage goes to the DIA and not other uses. “I felt kind of blindsided I guess,’ she said. ‘I felt a little bit like a chump.’ ”

Optics matter in cases like this. It’s going to be sticky no matter what happens, but I think the DIA board should reconsider–and either make its case publicly or find another solution.

Way back when, you may remember, some rich board members of the Museum of Modern Art supplemented Glenn Lowry’s salary with their own funds. Mike Bloomberg did the same for some members of his mayoral staff. Perhaps that is what can happen here.

 

Comments

  1. David Dixit says

    $514,000 & $369,000,

    I find these salaries too high… and I think that most Detroiters, home owners or not, would agree.

  2. What a tough position the DIA must be in. These salaries do seem high, but I have a feeling that is what the market is dictating. To keep top talent, and DIA is desperate for what they consider top talent, they are gonna have to pay a competitive wage.
    This is really an optimistic approach. The board is clearly not throwing in the towel by going for the lowest bidder.

  3. Jan Dillaha says

    This is exactly why I with some others support the DIA but did not support the millage. Mr Beal’s job is, in part, to bring in money. With the millage initiative Beal had the help of Commissioners and others to put a source of funding on the ballot to take tax dollars from every home owner in the tri-county region. We heard promise after promise that this would be used to fund an endowment so that the museum would be self- sustaining at the end of the 10 year millage.

    I am not the least bit shocked by the raise. The median household income in Wayne County and Detroit, where the DIA is located, is $41,000 and $25,000 respectively. Many of the patrons of the museum live in households that saw real decreases in income over the period that Mr Beal and Ms Erickson suffered deferred raises.

    Shame on the board, shame on Mr Beal and Ms Erickson. Shame on Eileen Kowall for believing the campaign promises that were made in early 2012 and for allowing a taxing authority whose members have little authority and no accountability to manage the millage. Shame on the voters of Wayne, Oakland and Macomb counties who made this possible by voting for the millage.

    • Thank you for your comment. I’d like to add some perspective, though. The millage revenues was not to go into the endowment, it was to pay for operations while the DIA staff raised money for the endowment to become something like self-sustaining. Even with the millage, the DIA still had to raise about $8 million a year for operations, as I recall.

      Then, before it could even begin the $300-400 million endowment campaign, it was hit with the need to raise $100 million to make the Grand Bargain work. So I don’t think that Beal and Erickson have been resting on the laurels of the millage.

      Their salaries/benefits certainly look large in the context of median household incomes there–but all museum directors salaries in metro areas would, too. In comparison with their peers in other large museums, their salaries are not out of line. I still do have trouble with the optics here, though–and the lack of a timely explanation and consultation with local pols.

  4. While the salaries might not be out of line, a bonus of $50K before the grand bargain has been resolved is a bit shortsighted. Let’s remember, too, that the cost of living near Detroit is not as high as many of the cities that have great municipal museums. On more thought: we should applaud Beal for sticking it out. That is admirable.

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