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The Detroit Institute of Arts defendd controversial raises for its two top executives, saying "unfortunately misunderstandings have occurred."
Board chairman Eugene A. Gargaro, Jr. says Friday in a lengthy statement:
"DIA executives work very hard to maintain a museum that is internationally respected, and they should be compensated in the same manner as their contemporaries in the art world. Nevertheless, in recognition of the very challenging economic times that have impacted our region and the financial hardships experienced by many of its citizens, the DIA has had a policy for many years of paying its top executives at a level slightly below the national mean for comparable positions at major art museums, notwithstanding their consistently high performance levels and the additional complications of managing a major cultural institution in Detroit’s challenging economic climate."
The controversy surfaced after The Detroit News reported that total compensation for director Graham Beal (pictured above) increased by 13 percent to $513,868. Annmarie Erickson, executive vice president and chief operating officer, saw her compensation increase by 36 percent in one year to $369,366.
The increases came in 2012, the same year voters in Macomb, Oakland and Wayne counties approved a $23 million millage to fund DIA operations for 10 years, and just months before the museum became embroiled in Detroit's historic bankruptcy case,the Detroit News wrote.
Gargaro says it's important for the DIA to operate in a transparently. He adds:
"We sincerely regret that we did not anticipate the way in which our promotion and compensation decisions in late 2011 and early 2012 would be perceived in late 2014 in light of the conditions that developed for the city and the region as the DIA millage was approved in late 2012 and as the City of Detroit entered bankruptcy in 2013. We pledge to keep the elected officials in Macomb, Oakland and Wayne Counties informed on a current basis as we make executive compensation decisions in the future. . . .
With regard to our compensation decisions in the last three years, here are the facts. Graham Beal and Annmarie Erickson have both served the DIA for more than 15 years and have taken the museum through many major milestones including the expansion and renovation of the museum building, the reinstallation of the art collection, the successful 2012 regional millage campaign and, most recently, the issues associated with the City of Detroit bankruptcy. They have provided strong and thoughtful leadership for the museum, and we feel fortunate to have them leading our team.
In September 2011, Ms. Erickson was named Chief Operating Officer of the DIA. While she assumed those duties immediately, her new contract was not finalized until the spring of 2012, during which interim period she was paid her pre-promotion salary. When the contract was finalized, Ms. Erickson received her salary increase at that time retroactive to the date of her assumption of her new duties, and in 2012 she received a 2011 performance bonus as well. The 36% pay increase which has been reported so prominently in the press resulted from this “bunching” of compensation related to 2011 into 2012. Had the compensation been paid in 2011 when it was earned, the increase in compensation from 2011 to 2012 would have been 4% not 36% (see table below).
With regard to our compensation decisions in the last three years, here are the facts. Graham Beal and Annmarie Erickson have both served the DIA for more than 15 years and have taken the museum through many major milestones including the expansion and renovation of the museum building, the reinstallation of the art collection, the successful 2012 regional millage campaign and, most recently, the issues associated with the City of Detroit bankruptcy. They have provided strong and thoughtful leadership for the museum, and we feel fortunate to have them leading our team.
