Komen’s Revenue Drops, Will Pay New CEO More

January 7, 2014       Mark Hrywna      

Note: This story was updated Jan. 9 at 4 p.m. to reflect details about the new CEO’s contract length and signing bonus.

Susan G. Komen for the Cure paid out almost $400,000 in severance last year to four executives who left the organizations, including nearly $270,000 to its former president, while contributions and other revenue dipped by 22 percent last year. The breast cancer charity also disclosed that its new president and CEO, Dr. Judith Salerno, will earn $475,000, about 40 percent more than her predecessor.

Elizabeth Thompson stepped down in September 2012. She joined Komen in 2008 to lead its research and scientific programs before becoming president in 2010.

Between the organization’s severance policies and California state law – where Thompson was a resident – Komen was required to pay certain things such as unused vacation days. The organization’s severance policies take into account a person’s level at Komen as well as the number years of service on the payroll, according to Andrea Rader, a spokeswoman for the charity.

A comparison between what Thompson earned as president and Salerno’s salary as president and CEO is inconsistent, Rader said. The most recent president and CEO, Hala Moddelmog, served from about September 2006 until November 2009, with reported compensation of $459,406 in her final full year in the post. Rader confirmed that Salerno will earn about $475,000 annually as part of a three-year contract that included a $20,000 signing bonus. Moddelmog had a three-year contract during her tenure.

Also receiving severance payments in the last fiscal year, according to Komen headquarters’ Internal Revenue Service (IRS) Form 990, were:

  • Nancy MacGregor, former vice president, global networks ($82,793), who left in June 2012;
  • Larry Lundy, former director, business development ($21,486), who left in November 2012; and,
  • Samuel Cheng, former controller ($18,739), who left in September 2012.

A number of other executives left the national organization, as well as at several affiliates, during the first half of 2012. They followed a dispute with Planned Parenthood. It’s been nearly two years since Komen discontinued grant funding to Planned Parenthood, claiming that it was a move to improve grant standards and criteria for community grants and move away from pass-through grants like those that fund mammograms by Planned Parenthood. Planned Parenthood countered that Komen aimed to distance itself from the organization.

Within days of the public spat, Komen reversed its decision on grant criteria but not before suffering a public relations black eye that has resulted in declining revenues and participation in its signature races and walks. Citing declining participation and economic uncertainty the last years, Komen in June announced it would reduce the number of three-day, 60-mile fundraising events this year from 14 to seven.

Consolidated statement of activities for 2013 showed about $270 million in contributions, sponsorships and race entry fees, a decline of about 22 percent from the $348 million reported in 2012.

In a “special disclosure of executive compensation information” dated Dec. 30, 2013 and posted on Komen’s website, the organization announced that Salerno’s annual salary as president and CEO will be $475,000. Komen declined to reveal the annual salary after announcing her appointment in June.

Thompson earned total compensation of $392,198 in her final full year as president, including a base salary of $321,726 and bonus of $51,000. Last year, her base compensation was $336,830, and the $269,622 severance payment boosted her total compensation to $632,513.

Komen operates on a fiscal year that ends in March, so the 990 that it filed in December 2013 is for the 12 months ending March 2013. Salerno was appointed last summer, which means the tax form that includes her salary will be filed until December 2014.

Founder Nancy Brinker’s annual salary will be $390,000 as chair, almost 30 percent less than the $549,380 she earned last year as president and CEO. Brinker moved to that a position after stepping down as president and CEO when Salerno was hired.

In 2012, Brinker earned $548,785, in addition to a bonus of nearly $125,000 that pushed total compensation to nearly $700,000. No bonuses or incentive compensation were reported for officers and directors on the most recent Form 990. She had been CEO since December 2009 after the positions of president and CEO were split. Komen announced in August 2012 that Brinker would step down as CEO but remain on the board of directors, serving as CEO until a permanent replacement was chosen.

“Nancy’s salary has been an issue and discussed pretty openly,” Rader said, adding that both Brinker and Salerno both wanted the organization to be transparent and current about their compensation.

As founder and chair, global strategy, Brinker will “focus on building Komen’s global outreach, with an emphasis on the growing cancer crisis in developing nations,” according to the organization. She will continue as a “lifetime member” of Komen’s 10-member Board of Directors.

In the disclosure, Komen cited Salerno’s more than 30 years of experience in public health programming and research oversight. “The compensation is conservative versus those of CEOs at other major charities and well below those on the 2013 Charity Watch Top 25 compensation packages,” the organization said.

“Komen’s compensation structure reflects the need to competitively attract and retain employees who can steward and grow our mission programs and raise the funds that support our work,” the disclosure stated, also making note that the organization “engaged independent compensation consultants to benchmark” the two salaries.

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