Top 2 at DIA got boost in compensation after millage

Jennifer Chambers
The Detroit News

Compensation for the two top officers at the Detroit Institute of Arts climbed by double digits, including $50,000 bonuses for each, according to 2013 tax documents filed by the nonprofit.

DIA director Graham Beal's total compensation increased by 13 percent to $513,868.

Annmarie Erickson, DIA executive vice president and chief operating officer, saw her compensation increase by 36 percent in one year to $369,366.

The increases came in 2012, the same year voters in Macomb, Oakland and Wayne counties approved a $23 million millage to fund DIA operations for 10 years, and just months before the museum became embroiled in Detroit's historic bankruptcy case.

Over the past year, as creditors pushed the city to sell DIA treasures to pay its debts, an unprecedented coalition of foundations and the state of Michigan came together to pledge $816 million to shield the art from creditors and bolster Detroit employee pensions.

Gene Gargaro, chairman of the DIA board and chairman of its compensation committee, said the increases were justified, based on several factors including personnel evaluations and the overall financial performance of the DIA.

For Beal, salaries of other museum directors and his 16 years at the museum were also considerations, Gargaro said.

In Erickson's case, she has taken on additional departments and employees over the years and has become the main contact between the DIA and the three-county art authorities paying the regional tax, Gargaro said. He called her the "outside person" for the museum who spends time in Lansing and City Hall speaking on behalf of the museum.

"When we were in dire straits, many times we gave Beal and Erickson credit for the work they've done to get us through these unique financial times," Gargaro said.

"Yes, it's a significant amount of money. That's what it takes to attract and retain top talent in our community."

L. Brooks Patterson, executive of Oakland County — which sends $11 million a year in regional taxes to the DIA for operations — said the bonuses are larger than what most Detroiters earn in a year.

"It's an insult to the Detroit taxpayers and it ranks up with there with Marie Antoinette's 'Let them eat cake,' " Patterson said.

"The optics of it stink. No one is holding a gun to their head to take the raises. They are going to lose public support and they need the support from the public. The public rallied behind the DIA and this is the thanks they get?"

Data on DIA compensation comes from the nonprofit's 990 tax form for 2012, which covers the tax year ending June 30, 2013, and included wages and income from W2 statements for 2012. The financial records recently were posted on the website, which provides information on national nonprofits and charities.

The bonuses, which are discretionary based on performance, were awarded because both Beal and Erickson started new contracts in 2012, said Robert E. Bowen, chief financial officer for the DIA.

Erickson was promoted to the role of COO on Sept. 1, 2011, but her contract wasn't signed until March 2012. Her bonuses were paid in 2012 and reflected in the most recent 990.

"Financially the museum is getting stronger. We are making progress toward our endowment goals. So therefore the compensations reflected the DIA performance," Bowen said.

Bowen said the base salaries for Beal and Erickson rank lower than the average salary of other museum directors and chief operating officers who work for museums with annual budgets of $20 million or more, based on data from an Association of Art Museum Directors survey.

This is the second year in a row that Erickson received a raise in her base salary and bonus and the third year for Beal. In 2011, Erickson received a $30,000 bonus while Beal's bonus was $35,000. At the time, DIA officials said the increases were tied to a new contract for Beal and promoting Erickson to COO. Beal received a bonus of $35,000 in 2010.

Since 2010, Beal's compensation has risen 20 percent while Erickson's has jumped 56 percent.

According to the 2013 tax filing, Beal still owes the full amount of a $155,832 housing loan he received in 2011 from the museum to buy a 6,000-square-foot English Cotswold-style manor home in Palmer Woods in 1999.

The six-bedroom, five-bath home has five fireplaces, a library and pool, and was created by famed architect Robert Derrick, who designed the Henry Ford Museum. It remains up for sale.

Bowen said Beal has the length of his contract to pay back the loan, but he would not disclose the length of the contract. Beal and Erickson declined to be interviewed, referring questions to Bowen.

The DIA's art assets have been the center of a contentious debate between the city creditors in the city's bankruptcy case who have argued its assets should be considered fair game for sale at a time when the city is asking others to take cuts.

While the city of Detroit owns the museum building and art collection, it no longer provides financial support to the DIA. Museum employees are paid with the DIA's general operating funds, a combination of membership dues, private donations and a regional tax approved by voters in Macomb, Oakland and Wayne counties.

The city's debt-cutting plan outlines $816 million in funding pledged as part of a "grand bargain" from a coalition of foundations, the state and museum to bolster Detroit pensions and preserve the art collection.

Last month in bankruptcy court, Erickson testified passionately about the nonprofit museum and its masterpieces.

She said liquidation of the DIA collection — which has been valued as high as $4.6 billion — would be a "devastating blow" to the museum's reputation, donor base and future funding. She also noted that Oakland and Macomb counties have threatened that the tri-county millage that supplies the majority of the DIA's operational funding "would be stopped" if art is sold.

"Without the millage or an infusion of a huge amount of cash, the museum could not survive," Erickson told U.S. Bankruptcy Judge Steven Rhodes.

Diane Kaplan Vinokur, associate professor of social work at the University of Michigan, who does research on nonprofits, said the salaries for the DIA executives don't seem out of line and perhaps the DIA board was sending a message to its officers to weather the storm.

"They have gone through the mill and stuck it out when other people may have left. It might be that part of this is for retaining them after putting in a particularly difficult year," Vinokur said. "It would cost a lot to recruit someone and bring them into the DIA."

Leon Drolet, director of the Michigan Taxpayers Alliance, which worked against the regional tax in 2012, said Beal and his staff, along with bankruptcy attorneys, are the only people making money during the city's financial crisis.

"It appears the only people who haven't made any sacrifices when it comes to Detroit bankruptcy is Mr. Beal and his assistants," Drolet said. "Taxpayers are paying more to support the DIA, pensioners are paying, charitable groups are donating. We have made the DIA sacred at the expense of everyone else."