In his first year at REBNY, Banks earned $250K less than Spinola

Tax filings show the former Con Ed lobbyist was paid $627K salary in 2015

From left: John Banks and Steven Spinola (Credit: Adam Pincus for The Real Deal)

In his first year on the job at the Real Estate Board of New York, John Banks received a total compensation of $627,335, the real estate trade group’s 2015 tax forms show. That’s nearly $250,000 less than what his predecessor, Steven Spinola, made in the same year, his final one as president of one of the city’s most powerful lobbying groups.

Experts in the world of nonprofit executive pay said there are multiple factors that go into calculating CEO compensation, an important one being length of tenure. Spinola was in the position for nearly 30 years, and spent part of 2015 in charge before formally passing the baton to Banks. But even if it’s only in terms of optics, the fact that REBNY’s first black president made a good deal less than his white predecessor can’t be ignored.

“It doesn’t look good. I can say that,” said Doug Sauer, CEO of the New York Council of Nonprofits. “The perception would raise the question about why he made less.”

A spokesperson for REBNY declined to comment.

Banks earned a base salary of $622,035 in 2015, with perks like money for retirement, deferred compensation and additional non-taxable benefits pushing his total compensation up to $627,335, REBNY’s annual filings with the Internal Revenue Service show. During that same period, Spinola took home a base salary of $846,035, and additional benefits pushed his total compensation for the year to $868,692.

REBNY announced in late 2014 that it had appointed Banks – then the top lobbyist at Con Edison – to serve as its next president. In March 2015, Banks assumed the role of “president-elect” and worked alongside Spinola during a transition period, which included negotiations that ultimately failed to renew the lucrative 421a tax incentive.

It’s not clear whether the compensation figures listed on the tax forms represent salaries for the full year, or just a portion. While the filings cover the 2015 tax year, which runs contiguous with the calendar year, they were only recently made available.

Just as salaries for top executives in the for-profit world are negotiated on the open market, nonprofits compete for top talent with enticing compensation and benefits packages.

Sauer said that for an organization the size of REBNY – it recorded gross revenues of $13.6 million in 2015 – it’s not uncommon to see such large salaries. Still, it is a rarified world.

Out of 4,587 charities studied in 2016, only 76 (or less than 2 percent) paid their CEOs $500,000 or more, according to Charity Navigator, an independent watchdog group. The median salary for a nonprofit CEO in New York City in 2016 was $175,803, the group found.

Sauer added that while it’s not inconceivable that REBNY would pay a newcomer less than someone with three decades of experience, nonprofits typically do pay more to minority leaders..

“Minority executive leadership, whether it’s Hispanics or Asians or African-Americans, is usually more of a premium in white organizations,” he said.

Sauer did note that his experience lies mostly with 501(c)3 nonprofits, the kind of organization charities typically use as a tax structure. REBNY is registered as a 501(c)6 – the main distinction being that the trade group is allowed to participate in political activities and has more freedom to lobby lawmakers.

Spinola’s compensation grew steadily over the years, save a slight downturn of just a few thousand dollars between 2008 and 2009 to $661,380. In the following years, REBNY gave him increasingly larger benefits, including a bonus of nearly $200,000 in 2012.

His total compensation topped out in 2014 shy of $1 million.

Other top-earning executives at REBNY include senior vice president James Whelan, who earned a total compensation of $501,139 in 2015, and CFO William Auerbach, who earned $354,676.

By Rich Bockmann | March 28, 2017 08:00AM

therealdeal.com

Minimum Wage Increase Pinches Compensation

Small businesses across upstate are cutting hours, reducing staff and taking other measures to cope with the costs of a higher minimum wage.

Nonprofit administrators, already pinched by tight budgets, are finding the minimum wage increase is adding to the daily turmoil of operating an organization dependent on dwindling government grants, donations and a pushback from clients as they try to raise fees to cover the higher wage expense.

Most community-based nonprofits are locked into federal, state and local contracts that will not honor the increased employee costs that the wage increase brings, meaning that nonprofits would have to use or raise charitable dollars to subsidize the increase, said Doug Sauer, chief executive of the New York Council of Nonprofits. Most don’t have these funds to allocate so they cut back on staffing and services.

“It should be noted that this wage increase is also alongside increases in workers comp and unemployment rates, and raises at the state level of what constitutes an exempt employee,” Sauer said. “There is a triple if not quadruple whammy on mandated employer costs.”

As of now, the state government does not fully compensate nonprofits that they contract with for additional mandated costs of doing business, and most government contracts with nonprofits also do not pay the full cost of nonprofits’ services, Sauer said. There is a significant effort underway to see that the state does compensate the additional cost.

Because of undercompensation, nonprofits either lose money on state contracts or they have to find other sources to subsidize the services the government is contracting for, Sauer said.

►Wage hike may stymie small business

“A vast majority of local nonprofits operate on a shoestring and try to make do with what little they have,” Sauer said. “We may be approaching a time where more and more nonprofits simply refuse to do business with the state because they can’t afford to.”

Some nonprofits may choose to raise fees for their services.

“But not all are fee-based and raising fees means that there will be more people not being able to access their services,” Sauer said. “So, more human needs go unmet, or for arts and cultural organizations, less people benefit from what they offer.”

Ultimately, the increase in minimum wage harms the nonprofit industry, Sauer said.

“From nonprofits being a business that needs to be solvent, it threatens the viability and sustainability of many unless government, philanthropy and donors are willing to invest in the nonprofit workforce,” Sauer said. “Nonprofits already have a problem with recruiting and keeping qualified staff, who easily go to work for government, schools and the private sector to better support themselves and their families.”

Matthew Steecker is Southern Tier regional business reporter for the USA TODAY Network.

Matthew Steecker, @MSteecker Published 6:22 a.m. ET Feb. 16, 2017 

http://www.democratandchronicle.com