Sunday, January 24, 2010

Ouch! That $400,000 sure stings

I've mentioned before the peek I've had into my likely post-layoff salary: less than I had been earning but by how much is the big question.

So it's hard not to join the noisy reaction (see the comment sections here and here) on the money going to the chief executives of new nonprofit news organizations.

We just learned, for instance, that Lisa Frasier, named last week as CEO of the Bay Area News Project in San Francisco, will be paid $400,000. Paul Steiger, who heads the nearly 3-year-old New York City-based ProPublica, received compensation of $570,000 in 2008. And TexasTribune, launched last fall in Austin, pays chief Evan Smith $315,000.

Steiger, of course, once served as managing editor of The Wall Street Journal. Frasier was a partner at the San Francisco office of McKinsey & Co. (Yes, the same consulting firm that reviewed the operations of magazine publisher Condé Nast just before Gourmet and a handful of other titles were shuttered last fall.) And Smith had a career in magazines, most recently leading Texas Monthly for nearly two decades.

All of which is to say the three are long on credentials that can command an executive salary.

The organizations they're leading are different in scope and focus but share the model of seeking donations from foundations, philanthropists and John Q. Public to keep alive the civic and investigative journalism that has been wilting under the pressure of newspaper layoffs, buyouts and closings.

To be a nonprofit is not to take a vow of poverty. Rather, an organization must petition the Internal Revenue Service for an exemption from taxes after proving it meets certain criteria and pledging that no one person will benefit from any earnings.

Nonprofits compete for talent as vigorously as for-profit businesses, and they often will cite the need to pay comparable head-honcho salaries in order to capture attention.

And, indeed, the $400,000 going to the Bay Area News Project's Frasier is the same as the base salary paid to Donald Graham, chairman and CEO of The Washington Post Co., a for-profit publisher.

Now I'll freely admit this is an apples-to-football comparison: Graham's total annual compensation actually is doubled by the awarding of so-called performance units based on overall company performance in four-year cycles. And the Post Co.'s latest proxy statement says the board of directors believes Graham should be paid more, when compared to peer CEOs (the base salary of The New York Times' Arthur Sulzberger Jr., for example, was $1.09 million in 2008), but that he declined.

Putting on my former business editor's cap, I can see that a supply-demand or what-the-market-will-bear case can be made for paying these nonprofit CEOs like their for-profit brethren.

But as one among many still-unemployed journalists, the six-figure salaries sting nonetheless.

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