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Detroit Detritus: Institute of Arts Responds to Cheap Shots Against Graham Beal’s Compensation

As reported this week by the Detroit News and Detroit Free Press, politicians are again seeking to score cheap points by positioning themselves as defenders taxpayers’ interests in questioning the entirely reasonable compensation of Graham Beal, the Detroit Institute of Arts’ esteemed long-time director.

While this is not the first time this has happened (see here and here), it could be the last.

Graham Beal, director, Detroit Institute of Arts Photo by Lee Rosenbaum

Graham Beal, director, Detroit Institute of Arts
Photo by Lee Rosenbaum

Beal had told me last April that he felt an obligation to stick with the Detroit Institute through the resolution of serious threats to his museum’s continued existence that had arisen during Detroit’s bankruptcy battles. With agreements now having been reached with the city’s pensioners and with its two major bond insurers, those threats appear to be subsiding.

Beal had told me that he was “turning 67” and that his contract with the museum “expires at the end of June next year [2015].” Any attempt to get “the DIA’s board of directors to reconsider these raises immediately” (in the words of state legislator Eileen Kowall) could be the last straw. Beal’s last hurrah should be a grand celebration of his heroic achievements, not an unceremonious kick in the butt.

It is an insult to Beal and a disgraceful disregard of all that he has tirelessly done in defending his city’s endangered cultural treasure to suggest that he is “lining his pockets” (again Kowall’s words). His compensation package is comparable to or lower than what is received by those who direct museums of similar size and stature that have less severe challenges to their very survival. Few could have been as resourceful as DIA’s currrent director in meeting those challenges.

The DIA today posted a lengthy statement (with specific figures) in which its board chairman, Eugene A. Gargaro, Jr., responds to the attacks on remuneration for Beal and for DIA’s chief operating officer, Annmarie Erickson.

Some excerpts from Gargaro’s statement:

The DIA has had a policy for many years of paying its top executives at a level slightly below the national mean [emphasis added] for comparable positions at major art museums….

We sincerely regret that we did not anticipate the way in which our promotion and compensation decisions in late 2011 and early 2012 would be perceived in late 2014 in light of the conditions that developed for the city and the region as the DIA millage was approved in late 2012 and as the City of Detroit entered bankruptcy in 2013. We pledge to keep the elected officials in Macomb, Oakland and Wayne Counties informed on a current basis as we make executive compensation decisions in the future.

With regard to our compensation decisions in the last three years, here are the facts. Graham Beal and Annmarie Erickson have both served the DIA for more than 15 years and have taken the museum through many major milestones including the expansion and renovation of the museum building, the reinstallation of the art collection, the successful 2012 regional millage campaign and, most recently, the issues associated with the City of Detroit bankruptcy. They have provided strong and thoughtful leadership for the museum, and we feel fortunate to have them leading our team.

In September 2011, Ms. Erickson was named Chief Operating Officer of the DIA. While she assumed those duties immediately, her new contract was not finalized until the spring of 2012, during which interim period she was paid her pre-promotion salary. When the contract was finalized, Ms. Erickson received her salary increase at that time retroactive to the date of her assumption of her new duties, and in 2012 she received a 2011 performance bonus as well. The 36% pay increase which has been reported so prominently in the press resulted from this “bunching” of compensation related to 2011 into 2012. Had the compensation been paid in 2011 when it was earned, the increase in compensation from 2011 to 2012 would have been 4% not 36% (see table below).

It is also important to note that the 2011 promotion and 2012 retroactive compensation adjustment occurred before the tri-county millage was approved. In 2013, the first year of millage payments to the DIA, Mr. Beal’s compensation increased by 4% and Ms. Erickson’s compensation increased by 3%.

The suggestion by my fellow ArtsJournal blogger, Judith Dobrzynski of Real Clear Arts, that the DIA should circumvent the public process and proper board governance procedures by adopting the widely deplored tactic formerly used at the Museum of Modern Art to secretly boost Glenn Lowry‘s take—using side payments from rich donors—should be a non-starter. (I critically examined the MoMA situation both on CultureGrrl and on New York Public Radio.)

Notwithstanding DIA’s explanatory statement, Mark Stryker of the Detroit Free Press today reports that Oakland County Commissioner David Woodward reiterated that “he would continue to push for greater public oversight over executive compensation at the museum in the wake of the 2012 voter-approved tax to fund the museum.” Woodward has threatened to try to scuttle the voter-approved millage through which his county’s taxpapers channel funds to the museum.

While (in the words of the museum’s own statement) “ensur[ing] that there is full transparency on compensation decisions” going forward, the DIA should defend and maintain its executives’ current compensation packages. They are well earned.

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