Chief Executives of New York City Cultural Institutions Looking at Lower Pay

I found this article to be of particular interest because I am sure if  this is happening in NYC this is probably happening all over, especially in states like Louisiana whose arts funding was cut by 80%. Please read the article below written by a writer for the New York Times.

In the past eighteen months, historically well-paid executives of major New York City arts and cultural organizations have frozen their salaries or taken cuts as their organizations’ budgets have shrunk, the New York Times reports.

Buoyed by years of revenue growth, many New York cultural institutions approved salary increases for their chief executives that rivaled those seen in corporate America. Compensation increases of 25 percent to 50 percent over five years were not unusual; in some cases packages nearly doubled. But as the recession tightened its grip on the economy, that trend reversed. For instance, Lincoln Center for the Performing Arts president Reynold Levy, who once received annual compensation of roughly $1 million, has twice agreed to salary reductions and last year received a package worth roughly half of what he was paid in 2008. “Most people in senior leadership roles at cultural institutions are at or below where they were in 2008,” said Jennifer Bol, a consultant at executive search firm Spencer Stuart. “Growth in these compensation levels really stopped.”

Cultural leaders interviewed by the Times said reductions were primarily a response to economic forces, although several noted the influence of increased scrutiny of nonprofit governance and compensation practices. The recent media mini-storms caused by the departures of Lawrence M. Small and Barry Munitz from the Smithsonian Institution and the J. Paul Getty Trust, respectively, amid public disclosures of lavish spending and perks, also has increased the level of public attention to the issue. In addition, the IRS tightened its compensation guidelines this year, with arts organizations increasingly being asked to justify their executive compensation packages.

Indeed, some of the leaders who had received large pay increases in recent years have recognized that budget cuts should apply to all levels of an organization. “An example had to be set,” said Metropolitan Opera general manager Peter Gelb, who cut his $1.5 million salary twice starting in December 2008. “As the head of the institution, I felt it necessary that it begin with me.”

Pogrebin, Robin. Taylor, Kate. “Reducing Pay for New York Cultural Executives.” New York Times 4/25/10.

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