DIA says it will revise executives' pay procedures
The Detroit Institute of Arts board chairman has vowed no further bonuses will be paid to the museum's two top executives unless the money is approved by three county art authorities or paid from non-taxpayer funds.
Mike Gingell, chairman of the Oakland County Board of Commissioners, said Wednesday he received an emailed letter from DIA chairman Eugene Gargaro earlier this week that outlined corrective action the museum is taking to be more transparent when it comes to executive compensation for DIA director Graham Beal and chief executive officer Annmarie Erickson.
Gargaro's letter came after The Detroit News reported on Oct. 9 that Beal and Graham each received $50,000 bonuses as well as double-digit pay increases in 2012.
Within days, an Oakland County commissioner threatened to dissolve the county's art authority unless the DIA reconsidered the bonuses and raises and put stricter measures in place to avoid such sizable increases.
The controversial compensation increases came the same year voters in Oakland, Wayne and Macomb counties agreed to higher taxes to support the museum with a 10-year regional tax millage. The tri-county tax raises about $23 million annually for the museum or 70 percent of its budget.
DIA leaders had argued in 2012 the millage was needed to prevent the museum's financial collapse.
According to tax documents filed by the nonprofit, Beal's total compensation increased 13 percent to $513,868. Erickson, DIA executive vice president and COO, saw her compensation increase 36 percent to $369,366.
Gingell said Gargaro has also promised there will be no more salary increases to Beal or Erickson "unless it's in accordance with DIA policy."
In the letter, which Gingell read to The News, Gargaro said he wants to work on connecting the three art authorities — which are contracted with the DIA and collect tax money on behalf of the county — with compensation decisions by meeting with them three or four times a year.
"So the county art authorities have opportunity for input, so that's a good measure," Gingell said. "They would review the DIA audited financial statements and discuss it in an open forum with the art authorities. It's definitely more outreach, more transparency, more practical steps to address compensation."
Reached by The News Wednesday afternoon, Gargaro declined to discuss the specifics of the letter or what it was offering. "I haven't had a chance to speak with the commissioners about it yet," Gargaro said.
Gargaro is expected to meet with commissioners during their caucus Thursday morning, Gingell said. That will take place just before the start of the regular board meeting, at which commissioner Dave Woodward, D-Royal Oak, had planned to offer a resolution to dissolve the Oakland County Art Authority, which sends $11 million a year to the DIA.
Gingell said once all 21 members of the board read the letter and speak with Gargaro, "my personal opinion is things will move on" and the issue of dissolving the art authority will be over.
Woodward said the letter is a positive development but there are still some outstanding issues to be resolved. Woodward wants the leadership at the art authorities to be able to ask questions about compensation.
He also does not want millage money used for executive compensation. The DIA could use privately donated funds for that, he said.
Woodward wants to see all the proposed changes codified into amendments to the articles of incorporation and to the contract the art authorities have with the DIA.
"Across the board, as authorities take on larger roles, accountability of operating procedures is important. We must ensure oversight is in place — it's absolutely essential," Woodward said.
According to the articles of incorporation of the Oakland County Art Institute Authority, the authority may be dissolved upon a yes vote by a majority of the board of commission.
Gargaro issued a public apology last week, saying the museum did not anticipate the uproar.
He defended the raises for Beal and Erickson, saying they "work very hard to maintain a museum that is internationally respected, and they should be compensated in the same manner as their contemporaries in the art world."
The bonuses and raises came just months before the DIA became embroiled in the city's bankruptcy and news that a collaboration of foundations pledged $366 million to protect the collection from creditors. The collection has been valued as high as $4.6 billion.
Macomb County Executive Mark Hackel and Wayne County Executive Bob Ficano said they were pleased to hear Gargaro wants the art authorities involved in compensation decisions.
"I think that's important in every issue, to get the counties involved ... I welcome that. This should have been part of the authority to begin with," Hackel said.
Both Hackel and Ficano credited Gargaro with stepping up to make the necessary changes. "It's a step in the right direction," Ficano said.
Ficano said he exchanged emails with Garago over how to remedy the situation.
"Gene, he called me up and he was extremely apologetic and conciliatory about how this came to be. He agreed this should have been more up front. I give him a lot of credit," Hackel said.
Asked whether he sees his county art authority approving bonuses for DIA executives, Hackel said no.
"I don't see that happening anytime in the near future. If they make a good case for it in the future, maybe," Hackel said.