Who Makes Big Bucks In Mar­ket?

The Bond Buyer - - Front Page - By lynn hume

WASHINGTON — The top ex­ec­u­tives of the Fi­nan­cial In­dus­try Reg­u­la­tory Board, the Mu­nic­i­pal Se­cu­ri­ties Rule­mak­ing Board, and some in­dus­try groups re­ceived to­tal com­pen­sa­tion top­ping $1 mil­lion in re­cent years, ac­cord­ing to The Bond Buyer’s lat­est sur­vey of com­pen­sa­tion lev­els at 23 mu­nic­i­pal mar­ket-re­lated groups.

These fig­ures far ex­ceed the high­est com­pen­sa­tion lev­els at state and lo­cal gov­ern­ment groups, which all came in un­der $500,000, as well as Se­cu­ri­ties and Ex­change Com­mis­sion Chair­man Jay Clay­ton’s salary of $174,500.

The sur­vey is based on the groups’ lat­est Form 990s, the forms that non­profit or­ga­ni­za­tions file an­nu­ally to the In­ter­nal Rev­enue Ser­vice.

The forms in­clude the groups’ rev­enues, ex­penses, net as­sets or pro­gram bal­ances, mem­bers’ dues, and ex­pen­di­tures on things like lob­by­ing and le­gal ser­vices, as well the com­pen­sa­tion of ex­ec­u­tives and other key staff of­fi­cials.

The sur­vey doesn’t ex­actly pro­vide an ap­ples-to-ap­ples com­par­i­son be­cause the forms vary ac­cord­ing to each or­ga­ni­za­tion’s fis­cal year and some of the groups are more up to date on their fil­ings than oth­ers. In ad­di­tion, while the tax in­for­ma­tion on the forms is for the fis­cal years for which the forms were filed, the com­pen­sa­tion fig­ures are usu­ally from W-2 or 1099 tax forms for cal­en­dar years.

RE­CENT FIL­INGS

Bond Deal­ers of Amer­ica had the most re­cent Form 990, for its fis­cal year end­ing Feb. 28 of this year. SIFMA, the MSRB and the Na­tional League of Cities forms were the next most re­cent, with SIFMA’s for the fis­cal year end­ing on Oct. 31, 2017 and MSRB and NLC forms for fis­cal years end­ing Sept. 30, 2017.

The Na­tional Gov­er­nors As­so­ci­a­tion Cen­ter for Best Prac­tices had the most out-of-date form, for its fis­cal year end­ing June 30, 2016.

In fact, nine of the 23 groups’ Form 990s were filed dur­ing or for cal­en­dar year 2016. Some of the older forms do not re­flect re­cent changes in the groups’ lead­er­ship.

For ex­am­ple, the high­est level of com­pen­sa­tion, as in pre­vi­ous years, was re­ceived by Richard Ketchum, who was chair and chief ex­ec­u­tive of­fi­cer of the FINRA un­til Aug. 14, 2016. His to­tal com­pen­sa­tion was $2.77 mil­lion, with most of that — $1.5 mil­lion — in bonuses and in­cen­tives. His base com­pen­sa­tion was $770,809 and his de­ferred com­pen­sa­tion and ben­e­fits were $495,000.

FINRA’s lat­est Form 990 was for 2016. Ketchum was re­placed by Robert Cook in Au­gust of that year. Cook’s to­tal com­pen­sa­tion for the year was $442,312, in­clud­ing a base salary of $328,109.

FINRA, along with the SEC, en­forces the rules that the MSRB writes. MSRB had no en­force­ment ca­pa­bil­ity be­yond pro­vid­ing data for au­dit trails and con­sul­ta­tion to the com­mis­sion and FINRA.

NEXT HIGH­EST

The next high­est com­pen­sa­tion lev­els were for the pres­i­dents and chief ex­ec­u­tive of­fi­cers of the In­vest­ment Com­pany In­sti­tute, the Amer­i­can Bankers As­so­ci­a­tion and SIFMA. ICI’s Paul Schott Stevens to­tal com­pen­sa­tion was $2.48 mil­lion, ABA’s Rob Ni­chols was $2.43 mil­lion and SIFMA’s Ken Bentsen Jr. was $2.37 mil­lion.

The top ex­ec­u­tives who made a to­tal of more than $1 mil­lion in com­pen­sa­tion in­cluded Amer­i­can Road and Trans­porta­tion Builders As­so­ci­a­tion Pres­i­dent and CEO Peter Ruane at $1.95 mil­lion, Fi­nan­cial Ac­count­ing Stan­dards Board Chair­man Rus­sell Golden at $1.16 mil­lion, and MSRB’s Lyn­nette Kelly at $1.05 mil­lion.

Kelly, who was listed on the form as ex­ec­u­tive di­rec­tor but more re­cently has been ti­tled MSRB pres­i­dent and CEO, had a base salary of $710,294.

Added to that was $141,480 in bonuses and in­cen­tives as well as $197,047 in de­ferred com­pen­sa­tion and other ben­e­fits. This was for cal­en­dar year 2016.

PERKS

In ad­di­tion, top FINRA and MSRB ex­ec­u­tives, as well as their board mem­bers, re­ceive some perks, sim­i­lar to the ex­ec­u­tives of in­dus­try groups. They are per­mit­ted to fly first class air travel for cer­tain flights, those of more than three hours dur­ing one-way trips, in the case of MRSB.

Ketchum had a car and driver for business pur­poses in New York City and Washington, DC.

He also was pro­vided up to $20,000 per year for per­sonal fi­nan­cial and tax coun­sel­ing.

Twenty-two of MSRB’s board mem­bers re­ceived to­tal com­pen­sa­tion of $818,650.

The board has 21 mem­bers but in­di­vid­u­als may go on or off the board in any given year, most of­ten be­cause of job changes.

BOARD MEM­BERS

MSRB of­fi­cials said board mem­bers typ­i­cally have re­ceived $45,000 an­nu­ally, with com­mit­tee chairs re­ceiv­ing an­other $5,000, the board’s vice chair an ad­di­tional $10,000 and the board’s chair an ad­di­tional $30,000.

The high­est level of com­pen­sa­tion was $65,000 for Colleen Wood­ell, MSRB chair for fis­cal 2017, which be­gan on Oct. 1, 2017.

Wood­ell is re­tired and for­mer chief credit of­fi­cer of global cor­po­rate and gov­ern­ment rat­ings at S&P Global Rat­ings.

The low­est level was $11,250 for Ed­ward Sisk, man­ag­ing di­rec­tor and head of pub­lic fi­nance at Bank of Amer­ica

Mer­rill Lynch who joined the board in fis­cal 2017 for a term that will ex­pire on Sept. 30, 2020.

The MSRB also paid $195,183 to five in­di­vid­u­als who were board mem­bers in fis­cal 2016, in­clud­ing Nat Singer, who was chair be­fore Wood­ell, Brian Wynne, Robert Cochran, James McKin­ney, and Marcy Ed­wards.

MSRB of­fi­cials said this in­for­ma­tion was on the 990 form be­cause board com­pen­sa­tion was for the 2016 cal­en­dar year.

FINRA paid to­tal com­pen­sa­tion of $1.81 mil­lion to 27 board mem­bers, not in­clud­ing its CEO. The self-reg­u­la­tor has a 24-mem­ber board that in­cludes its CEO.

In con­trast, the high­est to­tal com­pen­sa­tion level for an ex­ec­u­tive of a state or lo­cal gov­ern­ment group was $491,532 for Matthew Chase, ex­ec­u­tive di­rec­tor of the Na­tional As­so­ci­a­tion of Coun­ties. Ac­cord­ing to the Form 990 for cal­en­dar year 2017,

Chase’s base pay was $382,676 and he re­ceived $45,000 in bonuses and in­cen­tives as well as $63,856 in de­ferred com­pen­sa­tion and other ben­e­fits.

The next high­est was $480,281 for Clarence An­thony, ex­ec­u­tive di­rec­tor, sec­re­tary and trea­surer of NLC, ac­cord­ing to the group’s Form 990 for the fis­cal year end­ing Sept. 30, 2017.

An­thony’s base com­pen­sa­tion was $408,425. In ad­di­tion, he re­ceived $28,102 in bonuses or in­cen­tives and $43,754 in de­ferred com­pen­sa­tion and other ben­e­fits.

He was fol­lowed by Jeff Esser, for­mer ex­ec­u­tive di­rec­tor of the Gov­ern­ment Fi­nance Of­fi­cers As­so­ci­a­tion, who re­ceived $424,281 in to­tal com­pen­sa­tion, ac­cord­ing to GFOA’s Form 990 for the fis­cal year end­ing March 31, 2017.

The NCSL [Na­tional Con­fer­ence of State Leg­is­la­tures] Foun­da­tion for State Leg­is­la­tures, in­cluded in the sur­vey for the first time this year, gets a $1.31mil­lion grant from the NCSL and its Ex­ec­u­tive Di­rec­tor Wil­liam Pound serves as a vol­un­teer, ac­cord­ing to the Form 990 that group filed for the fis­cal year end­ing June 30, 1917.

At least three of the 23 groups had man­age­ment or con­sult­ing con­tracts with firms.

The Na­tional As­so­ci­a­tion for Lo­cal Hous­ing Fi­nance Agen­cies paid SmithBuck­lin Corp. $401,095 for man­age­ment, ac­cord­ing to NALHFA’s Form 990 for the 2016 cal­en­dar year.

The Coun­cil of In­fra­struc­ture of Fi­nanc­ing Au­thor­i­ties paid Madi­son As­so­ci­ates, a con­sult­ing firm, $373,100 for 2016, ac­cord­ing to CIFA’s 990 form for that year. The As­so­ci­a­tion of Fi­nan­cial Guar­anty

In­sur­ers paid Mackin & Casey $252,434 as ex­ec­u­tive di­rec­tor.

As for per­son­nel changes since the 990 forms were filed, Bill Daly, the Na­tional As­so­ci­a­tion of Bond Lawyers’ di­rec­tor of gov­ern­men­tal af­fairs was re­placed by Jes­sica Giroux at the beginning of this year.

Jeff Esser was re­placed by Chris Mor­rill as ex­ec­u­tive di­rec­tor of GFOA on May 1, 2017.

Tom Crip­pen was suc­ceeded by Scott Pat­ti­son as ex­ec­u­tive di­rec­tor and CEO of the Na­tional Gov­er­nors As­so­ci­a­tion in De­cem­ber 2015.

Shaun Sny­der be­came ex­ec­u­tive di­rec­tor of the Na­tional As­so­ci­a­tion of State Trea­sur­ers in Oc­to­ber 2017, re­plac­ing John Proven­zano. Bar­bara Thompson was re­placed by Stock­ton Wil­liams as ex­ec­u­tive di­rec­tor of the Na­tional Coun­cil of State Hous­ing Agen­cies in March 2018. ◽

The high­est to­tal com­pen­sa­tion level for an ex­ec­u­tive of a state or lo­cal gov­ern­ment group was $491,532 for Matthew Chase, ex­ec­u­tive di­rec­tor of the Na­tional As­so­ci­a­tion of Coun­ties.

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