I was scanning the 2014 Charity CEO Compensation Guide published by Charity Navigator. It’s an interesting read. Needless to say the numbers were substantially higher than what I earn, and occasionally seemed distasteful to me. “We know that many donors continue to be concerned by what they believe to be excessive charity CEO pay”. The median CEO salary across 2,582 charities was $120,396. I thought it would be higher. In general larger charities have better-paid CEOs, which seems reasonable. The study reviews a total of 3,929 charities and finds only 12 CEOs earning in excess of $1 million. They conclude:
“While it is true that the paychecks of some nonprofit executives are outrageously high, this study confirms that those receiving excessive pay are in the minority… We recognize that many donors will be hesitant to agree that the CEO of their favorite charity deserves a six figure salary.”
So, I thought I would check the executive salaries at Accion, the masterminds behind “financial inclusion” powerhouses such as Compartamos and MiBanco. They also run the Smart Campaign, the closest thing the microfinance sector has to a self-regulator. Whether this might represent a serious conflict of interest is a topic that has apparently evaded the sector, discussed elsewhere.
So, taken directly from pages 8 and 39 of the publicly available 990 Form (2012), here are the 11 highest-paid people in Accion.
Enrique Ferraro, Managing Director, Accion Investments in Microfinance, $1,233,192
John Fischer, CIO, $964,419
Esteben Altschul, COO, $479,701
Catherin Quense, Sr VP, $478,836
Michael Schlein, CEO, $468,439
Mary Chaffin, General Counsel, $281,977
Brian Kuwik, Regional Head Africa, $265,724
Livingston Parsons III, CFO, $263,931
Elizabeth Rhyne, Sr VP, $251,084
Donella Rapier, CDO-CAO $230,955
Diego Guzman, Regional Head Latin America, $224,758
This is basically the sum of base salary, salary from related organizations and other compensation. The total remuneration of these 11 people was $5.14m. Call me stingy, but these seem quite high salaries for 35 hour weeks (as stated in the 990 Form). To put this into perspective, were he to work 35 hours per week, Enrique Ferraro netted a little over $700 per hour worked. Michael Schlein, CEO, was the fifth highest earner, not even reaching $0.5m. Beth Rhyne, creator of the ill-fated Smart Campaign, earned a paltry $0.25m, under $150 per hour.
Of course this omits the bumper payments to former Accion director Maria Otero, who earned $2m during the IPO of Compartamos.
The source of this money is not so clear. Obviously most comes from their profitable activities in microfinance, which means it is directly or indirectly paid in interest and fees from low-income clients; but Accion actually receives donations on top of this. On their website are listed the following supporters:
Bill & Melinda Gates Foundation, Citi, Credit Suisse, Deutsche Bank, FMO (Dutch government funding), Ford Foundation, IDB, IFC, Mastercard, UPS and Visa.
“Our supporters are critical to advancing our mission of giving people the financial tools they need to improve their lives.”
Are these salaries high? Is this “outrageous”, to coin the phrase used by Charity Navigator? Does this sit uncomfortably with the (some would say extortionate) interest rates charged to the poor by Accion’s microfinance banks? Yunus himself likened such activities to loan sharking, and commenting on the Compartamos IPO suggested “They’re absolutely on the wrong track…. Their priorities are screwed up.” I wonder if there isn’t something rather distasteful about selling financial inclusion as the solution to poverty while charging triple-digit interest rates to poor Latin Americans and Africans to pay such salaries to senior management. Another question of course is: should these people be running the Smart Campaign, whose claim is to act as something between the sector’s ethics committee and its self-regulator? Guess whom Smart just awarded with their certification? Compartamos! Potential conflict of interest here?
Leave a comment below, send me an email, or if you’re green with envy, maybe go get a job at Accion.