wfn.org | Board of Pensions Mulling "Huge" Salary Increases

[PCUSA NEWS <pcusa.news@ecunet.org>]

1-March-2000 
00099 
 
    Board of Pensions Mulling "Huge" Salary Increases 
 
    Supporters say top executives are "woefully underpaid" 
 
    by Jerry L. Van Marter 
 
LOUISVILLE, Ky. - The Presbyterian News Service has learned that the Board 
of Pensions of the Presbyterian Church (U.S.A.) is considering a proposal 
to give substantial pay raises to six of its top executives. 
 
    The proposal, developed by the Board's staff in response to requests 
from several Board members and endorsed by its Personnel and Executive 
Committee, would lift four of the executives' salaries above the $150,000 
mark, with new president Robert Maggs on top at $185,000. The remaining two 
would make more than $130,000. 
 
    The matter will be on the agenda when the Board meets in Philadelphia 
March 9-11. 
 
    The six affected executives are Maggs; Frank Maloney, executive vice 
president and chief operating officer; Judith Freyer, senior vice 
president, treasurer and chief investment officer; Margaret Mellen, senior 
vice president for healthcare; Anna Roberts, vice president for pensions; 
and Hy Rudin, vice president of human resources. 
 
    According to the 1998 minutes of the General Assembly, Maloney made 
$113,000, Freyer $104,400, and Mellen $102,000. Maggs, Rudin and Roberts 
weren't on the Board's staff in 1998. 
 
    The top salaries at the Presbyterian Center are drawn by John 
Detterick, the General Assembly executive director (and former Board of 
Pensions president), and Clifton Kirkpatrick, stated clerk; they make 
between $145,000 and $150,000. Detterick's salary in 1998, when he left the 
Board, was $130,000. The new president of the Presbyterian Foundation, 
Robert E. Leech, will make $148,000. 
 
    The reasons cited for the salary hikes were the higher cost of living 
in Philadelphia, where the Board's offices are located, and the 
competitiveness of the job market for executives of the quality of those on 
the Board of Pensions staff. 
 
    The cost of living in Philadelphia was estimated recently by 
nationally-recognized relocation firms to be about 25 percent higher than 
in Louisville. 
 
    One Board member, who asked not to be identified, called the proposed 
raises "huge." 
 
    "We simply could not replace Frank Maloney and Judy Freyer, just to 
name two," said Gloria Wilson, the Board's chair. "We looked and looked at 
other church and non-profit entities, and we're really low." 
 
    "We're the third-largest church pension plan in the country," Maggs 
told the Presbyterian News Service. "Two surveys of church pension funds - 
one in 1996 and one two months ago - placed us in the 75th percentile in 
terms of size, and the CEO salary for the 75th percentile is $215,000; so 
even with this increase, we're still low, at the 50th percentile." 
 
    Several current and former Board members contacted by the Presbyterian 
News Service said they cannot recall any senior Board of Pensions executive 
who has quit because of inadequate pay. 
 
    That's not the point, Wilson argued in a Feb. 29 interview. 
 
    "Of course we're worried about the reaction to this out in the church," 
she said. "But we believe that without top executives such as these, we 
can't give the level of service to members that we want and they deserve." 
 
    Maggs said the entire report on salary issues that was prepared for the 
Board - minus only the exact salary figures - was shared with the PC(USA)'s 
Advisory Committee on Churchwide Compensation last month. 
 
    "We put this whole thing together in light of the new churchwide 
compensation guidelines, to which we're committed," he insisted. 
 
    Maggs said the salary increases "are not a budget buster at all." The 
Board's 2000 budget, including the raises, is 4.7 percent higher than that 
of 1999. 
 
    "I wrestled with this," said the Rev. K. Edward Brandt, a Board member 
who has a solid reputation of advocacy for the rank-and-file. In the end, 
he surprised many observers by supporting the proposal. 
 
    "There were two factors, really," Brandt explained. "First, when I came 
on the Board, there was a medical fund deficit of $15 million, and now 
there's a $40 million surplus, in addition to enhanced benefits. Second, we 
have had several years of experience apportionments (added pension dollars 
for retirees and pension credits for active members based on investment 
performance) far in excess of inflation. I want to make sure we keep the 
people who are responsible for these kinds of results, which help us all." 
 
    Brandt said he knows from conversations with professional financial 
people who serve on the Board "that our top people are both highly 
respected and woefully underpaid." 
 
    "Of course they choose where they work," he said, "but we trust these 
folk with a lot - the Board of Pensions is a $6 billion operation - and we 
owe them fair compensation. 
 
    "It's our livelihood we're talking about - our health care and our 
retirement," Brandt added. "We all want the best decisions for our 
livelihood, and we owe these leaders for that." 

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