Despite pledging reform, FIFA pays millions to ruling council
DESPITE promises of reform and mounting losses, FIFA, world football’s governing body, paid members of its ruling council nearly $10 million last year.
According to three people with direct knowledge of the payments, FIFA, a nonprofit organisation, paid each of the elected representatives on its 37-member council $250,000 salaries, plus tens of thousands of dollars more in travel expenses, in 2017.
The people asked not to be identified because they were not authorised to disclose the information before FIFA officially releases it in March.
That level of compensation – for a council that is scheduled to meet only three times this year – far exceeds payments for similar work at some of the world’s largest for-profit companies.
It also appears to contradict the pledges, made repeatedly by FIFA’s president, Gianni Infantino, since his election in 2016, to restore the organisation’s credibility by implementing fiscal discipline.
With the World Cup in Russia only months away, FIFA is entering a crucial period as it tries to convince the fans, media partners and sponsors who make it a $1 billion-per-year operation that its culture has changed from the corrupt organisation described in a series of indictments unsealed by US prosecutors in 2015.
With most of FIFA’s top leaders ousted after those scandals, Infantino won a special election for the presidency in 2016, promising both to reform the organisation and increase its annual payments to member associations.
The continuing generosity that FIFA shows toward the members of its ruling council calls into question how serious it is about reforming it- self, two and a half years after those indictments and reports of other secret payments to top executives toppled the Zurich-based organisation’s leadership, including its former president Sepp Blatter, his one-time heir apparent Michel Platini and Blatter’s top deputy, Jerome Valcke.
‘Hard to understand’
“There should be, especially for a nonprofit, some sort of justification for the sum,” said Alexandra Wrage, president of the corporate governance adviser Trace International.
Wrage previously advised FIFA about corporate governance reforms before quitting in 2013. She has since become one of the organisation’s loudest critics.
“I don’t see the justification in the resumes; I don’t see the justification in market pressure,” Wrage said of the payments to the board members. “It is hard to understand.”
The FIFA Council replaced a previous 25-person executive committee, part of an effort by FIFA to reshape its top level of management after the arrests of some of its former executive committee members.
FIFA’s board is drawn from football’s six regional confederations. In addition to their salaries, members receive additional $150 per diem payments as well as business-class travel and accommodation while attending FIFA meetings and events.
According to the accounting firm KPMG, the average pay for executives who perform similar roles for Britain’s top 100 listed companies is £60,000, or about $81,000.
Lodestone Global, which helps firms to design boards of directors, stated in a report that analysed 331 companies in 39 countries that nonexecutive directors for private companies of comparable size to FIFA should receive about $48,000 a year.
In fact, the $250,000 base compensation for a FIFA Council seat represents a degree of belt-tightening.
Previous members of the executive committee received at least $300,000 in annual pay and perks, including $500-per-day allowances and first-class air travel for them and their partners.
The details of this year’s salaries are expected to be made public when FIFA publishes its 2017 financial statement.
The organisation has taken a financial hit from its legal problems, accruing more than $100 million in legal fees during the past two years.
It has also struggled to entice sponsors to attach their brands to the World Cup, a concern after a group of veteran sponsors decided not to renew their agreements.
Last spring, FIFA announced a $369 million loss for 2016 and said it expected that number to climb higher in 2017.
While it has grown in size, the influence of the governing board has diminished considerably since the days of the executive committee. That group had the power to make FIFA’s most important decision: where to stage the World Cup.
FIFA Council members do not have that privilege – instead, FIFA’s full membership will vote on such matters moving forward. Infantino is making further plans to assign other major decisions to a sevenperson group he will lead with the six regional confederation heads.
Short of industry standards
FIFA has eliminated the pension plans it once paid to former executive committee members and, unlike at the last World Cup in Brazil, its officials will not have 24-hour access to limousines in Russia.
However, FIFA still falls well short of industry standards. On its website, it says that the council is “a nonexecutive, supervisory and strategic body that sets the vision for FIFA and global football”.
Yet nonexecutive board members of businesses the size of FIFA – which generates about $5.5 billion per fouryear World Cup cycle – earn far less for their roles, according to surveys by some of the world’s leading professional services companies.
In fact, organisations like FIFA should not pay board members anything beyond their expenses, according to guidelines published by the National Council of Nonprofits, which is based in Washington.
The council has argued that nonprofit board members should serve voluntarily and not benefit from their service.