Six economic development chiefs make more than $100K a year
From The Oak Ridger
January 7, 2008
John Huotari
john.huotari@oakridger.com
EDITOR'S NOTE: This is the first of a three-part salary series focusing on directors of local nonprofit organizations. In Part One, The Oak Ridger looks at the compensation paid to the leaders of eight economic development organizations.
Federal tax records suggest that it can be profitable to lead a local nonprofit organization.
The leaders of six local economic development organizations each received more than $100,000 in annual compensation, according to the most recent tax records available online.
In tax records reviewed by The Oak Ridger, the largest nonprofit paycheck went to Tom Rogers, Technology 2020 president and chief executive officer. He received $252,587 in compensation in calendar year 2006, according to the company's tax return.
Lawrence Young, president and CEO of the Community Reuse Organization of East Tennessee, took home the second largest check. He received $196,000 in compensation in the tax year ending Sept. 30, 2006, according to tax records.
Comparing their salaries to those paid to executives at other nonprofit organizations can be tricky.
"Tech 2020 is not your average nonprofit," Rogers said. "So comparisons with the total universe of nonprofits are misleading."
Among other things, some types of nonprofit organizations offer higher median salaries than others. Heath and science organizations offer the highest median salaries, while food, religion and housing organizations pay the lowest, according to a 2007 GuideStar Nonprofit Compensation Report.
Compensation of the local economic development executives is generally higher than average when compared to nonprofits with similar budget sizes across the country.
But Kim Denton, Oak Ridge Economic Partnership president, said professionals in her field use an industry-standard salary study put out by the International Economic Development Council.
"They typically don't lump economic development in with traditional nonprofits," Denton said. "It's kind of its own separate animal."
She said the IEDC study shows that local salaries are "more in line" than might be indicated by general nonprofit averages.
Rogers said a compensation committee sets his pay, and Tech 2020 is required to show the Internal Revenue Service that the pay is "reasonable and comparable to other similar positions."
"I have been offered more money on several occasions to lead organizations in other cities but have elected to remain in East Tennessee," Rogers stated in an e-mail to The Oak Ridger.
Young, who has been out of the country, was unavailable for comment.
Collecting smaller paychecks than Rogers and Young were:
- Parker Hardy, Oak Ridge Chamber of Commerce president and CEO. He received $131,531 in compensation in calendar year 2006.
- Jim Campbell, East Tennessee Economic Council president. He took home $120,679.
- Kim Denton, Oak Ridge Economic Partnership president. She collected $105,450.
- Leslie Henderson, The Roane Alliance president and CEO. She brought in $101,417 in the tax year ending June 30, 2006.
- Tim Thompson, president of the Anderson County Economic Development Association. He received $83,000 in compensation in the tax year ending June 30, 2007, according to tax records.
- Jackie Nichols, Anderson County Chamber of Commerce president. She said she was paid $50,000 in calendar year 2007.
Compensation can include salaries and bonuses, and might not include benefits, if any. For example, Rogers said his $252,587 in 2006 is total compensation in "a record year for Tech 2020."
"My base salary is $187,500," he said.
Pay raises up to 10 percent
The tax returns reviewed by The Oak Ridger also showed that some local economic development officials have received pay increases of up to 10 percent.
Young's compensation jumped from $178,000 in the tax year ending Sept. 30, 2005, to $196,000 the next year. That's an increase of $18,000 a year -- or 10.1 percent.
Meanwhile, Campbell's compensation went from $110,747 in calendar year 2005 to $120,678 in 2006. That's a 9 percent increase and an extra $10,000 a year.
Other executives received compensation increases between 3 and 7 percent.
Though the size of her bonus might have increased, Henderson said she refused a pay raise "so as to be able to give my staff some much-needed raises."
Campbell did not return phone and e-mail messages requesting comment.
"I'm not going to respond to your messages," Campbell said in a brief in-person interview at ETEC's annual meeting Friday. "I'm not going to talk about salary," he said.
Saying the annual meeting was "not the right time to discuss it," Campbell also said he would not talk about his compensation increase or confirm financial information listed on ETEC's tax records.
'We are competitive'
In response to a question on the subject, four of the executives interviewed for this story said their compensation is set by members of each organization's board of directors.
Hardy said the Oak Ridge Chamber of Commerce periodically has a third party do a salary study. He said compensations can be based on a variety of factors, including an organization's total budget, staff size and mission. Also considered are a person's experience, responsibility level and the compensation offered by other organizations.
"We are competitive with other chambers of commerce or other economic development organizations with whom we compete in the state and the region," Hardy said.
Denton pointed out that Oak Ridge's uniqueness, including its federal facilities, have an impact on the local economic development community, affecting the types of organizations here and perhaps indirectly factoring into executive compensations.
"It's just not your typical town of 28,000 (residents)," she said.
Tax info public
The returns of organizations that are exempt from taxes are known as Form 990s, and they are open to public inspection. They can be viewed online at www.GuideStar.org.
However, many tax-exempt organizations -- like churches or organizations that have gross receipts of less than $25,000, for example -- have not filed Form 990s because they have not been required to do so.
Those conditions have changed, however, under the Pension Protection Act of 2006. Beginning this year, small tax-exempt organizations that previously were not required to file returns, including those with gross receipts of $25,000 or less, may be required to file an annual electronic notice, Form 990-N.
There are exceptions, including for churches.
Most financial information for this article was taken from IRS Form 990s posted at GuideStar.org and confirmed by executives associated with the respective economic development organizations.
But the Anderson County Chamber of Commerce has apparently not filed a recent tax return, so The Oak Ridger got financial information for that organization from Jackie Nichols, Chamber president.
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