DIA chair: Counties can’t block executive raises
The chairman of the Detroit Institute of Arts maintained Wednesday that a compensation package of $625,185 is justified for his top executives and that county art authorities don’t have a say if private funds are being used to pay a majority of it.
Gene Gargaro appeared before the Oakland County Art Authority to present a list of raises and bonuses for his executive staff, and a $285,000 retirement severance and forgiveness of a $155,832 housing loan for director Graham Beal, who left the museum June 30.
Gargaro agreed that the authorities, which collect regional tax money from Oakland, Macomb and Wayne counties, do have a say in raises when operating funds are used to pay them.
But he added he was following the rules outlined in an agreement between the DIA and the authorities that says the raises must be at or below the national median for museum directors.
“We have a $34 million business to run. In order to attract and retain the kind of executives we have ... we have to pay a commensurate package,” he said.
The compensation package for Beal and executives Annmarie Erickson and Robert Bowen covers fiscal years 2014 and 2015 as well as promises in Beal’s contract. It includes $135,000 combined in bonuses for all three and 3 percent raises for Erickson and Bowen.
“I can’t say enough how sensitive we should be. We are receiving millage dollars,” Gargaro told the authority. “But as chair, I have a duty to run a business and maintain its status in the world. These three executives are critical to that. Our requests are reasonable.”
Taxpayers in Macomb, Oakland and Wayne counties, which send $23 million a year to the DIA in a regional tax, would pay only for the raises — about $49,000 — because DIA officials intend to use private donor funds for the rest.
Members of the Oakland County art authority had questions.
Authority member Barbara Dobb asked Gargaro whether the segregated, private-donor fund for compensation could be used for any other purpose at the museum. Gargaro said no, adding that donors signed agreements saying the money could only be used for compensation.
Oakland County commissioner John Scott, R-Waterford Township, said he was still moving forward with a resolution to block the raises. Late Wednesday, Scott's resolution was referred to the general government committee of the Oakland County Board of Commissioners. Scott said he is asking Gargaro and members of the art authority to attend a Sept. 9 meeting to explain how bonus amounts were determined.
"How did they come up with this? It's going to open up a dialogue," Scott said.
Scott’s resolution states the increase in compensation “is a violation of the spirit of shared sacrifice that has been the cornerstone of preserving the Detroit Institute of Arts throughout the millage election and the bankruptcy of the city of Detroit.”
The resolution directs the Oakland County representatives appointed to the DIA governing board to oppose the increases.
Tom Guastello, Oakland art authority chairman, said the use of private funds is outside the control of the authority but the raises need to be looked at further. He said the authority would readdress the raises in six weeks.
After the meeting before the Oakland County Art Authority, Gargaro acknowledged the optics of the issue may be the real problem. “There is never a good time for this,” he said of the compensation boost.
The DIA must inform the counties of compensation decisions before they are enacted under an agreement with the three county art authorities. This is the first time the new terms have come into play. DIA leaders met with Macomb officials Aug. 17 and will meet with Wayne officials Sept. 14.