From AVwebBiz:
Revenue Down, Salaries Up At AOPA
While the aviation industry in general suffered massive layoffs and pay rollbacks in 2009, AOPA's top managers got an overall 14.5 percent pay increase, according to the association's IRS filings. In addition, an AVweb review of AOPA's publicly available tax returns revealed that the association's expenses increased by 25 percent in 2009, with association expenses exceeding revenues by about $5.1 million. To cover its rising expenses in part, the association recently raised its membership dues from $39 to $45, an increase of more than 15 percent.
On the salary side, compensation of current officers, directors, trustees and key employees was reported at $4,838,086 in 2009, up from $3,957,000 reported in 2008, a 22-percent increase in top management expenditures. However, some of the increase is due to AOPA president Craig Fuller's first full year of salary. He worked only a partial year in 2008. The combined increase for AOPA's top executives was 14.5 percent, including payouts to outgoing AOPA president Phil Boyer in 2008 and 2009 of $1,549,245 and $1,859,539 respectively.
The pay increases came as revenue declined substantially in 2009 and operating expenses jumped. Revenue from membership dues took a slight hit in 2009, but AOPA spokesman Chris Dancy said most of the revenue loss was due to reduced advertising sales.
Dancy told AVweb the association has a defined process for establishing employee compensation in which the salaries of employees in other sectors are periodically surveyed. "Specifically, compensation is established by an independent Board of Trustees using the survey data which is benchmarked against similarly qualified employees in comparable positions in similarly situated organizations," Dancy said.
However, AOPA's executive percentage increases were larger than both the federal government and industry in general, according to Business and Legal Reports, which found that about 39 percent of companies are making downward adjustments in salaries, while others are freezing salaries or offering merit and cost of living increases in the 1- to 3-percent range.
Meanwhile, total salary costs for other workers at the association -- whether through attrition or rollbacks -- were reduced by about 12 percent. AOPA didn't respond to our query about specifics on staff head count. AVweb's analysis of the IRS filings and financial data posted on AOPA's website raised a number questions that we posed to AOPA via e-mail, seeking additional detail. Although the association pointed us to additional web data, concise answers weren't provided. Click here to see our questions and AOPA's answers (PDF). We requested an interview with Craig Fuller or another AOPA official, but the association didn't respond.
Full disclosure: The AOPA Air Safety Institute (Air Safety Foundation) is a current AVweb advertiser and AVweb's parent company, Belvoir Media Group, is a former AOPA preferred partner under an agreement that expired in July of 2009.
Dancy said the IRS forms we reviewed provide data only on the non-profit side of AOPA. The organization owns three taxable entities: the AOPA Service Corporation, AOPA Membership Publications Inc., and the AOPA Insurance Agency. AVweb confined its examination to the AOPA return and is in the process of evaluating IRS filings for the AOPA Air Safety Foundation and the AOPA Foundation Inc.
AOPA has substantial assets -- both in real property and securities. According to the forms we reviewed, net assets increased significantly during 2009, from $79 million to $98 million, which includes approximately $9.5 million in financial derivatives defined as "alternative investments."
Dancy offered a different view of the asset picture and said it's in line with other associations. "Overall, AOPA's reserves increased from $61 to $75 million in 2009, primarily due to the stock market recovery of 2008 losses," Dancy said. "Most associations maintain financial reserves that equate to approximately 125 percent of annual expense on average. AOPA's equals 120 percent."
The consolidated statement shows revenue down substantially across the board but it also notes an increase in lobbying efforts, part of which Dancy attributed to the creation of the General Aviation Serves America campaign and AOPA's role in the fight against user fees.
One of the largest expense increases we noted was the association's annual exposition, now called AOPA Summit. In 2008, the association spent $1.087 million for this show, but in 2009, it spent more than twice as much, $2.85 million. Other substantially higher costs involved lobbying ($1 million) and print, mail, postage and premium costs.
Although these have declined in the publishing industry in general, AOPA spent 32 percent more in 2009 than in 2008. AOPA also spent an extra $1.4 million (19 percent more) on promotions aimed at retaining memberships and subscriptions in its various programs and publications. One thing did remain the same from 2008 to 2009. Administration costs ($5.4 million) were virtually identical in both years.
Specifically, the association listed these top managers and salaries for 2009: Craig Fuller, President: $582,484; Roger Myers, VP/CFO: $372,307 (11 percent increase); Harvey Cohen, VP/CDO: $351,776 (8 percent increase); Andrew Cebula, VP/Government Affairs: $398,780 (16 percent increase); Diana Roberts, Director, Planned Giving: $330,709 (55 percent decrease); Greg Pecaro, VP Regional Affairs: $169,361 (12 percent increase).
Other managers listed on the 2009 filings but who didn't appear in the 2008 filing included Lorraine Howerton, VP Legal Affairs: $230,274; Steve Shaffer, VP/CIO, $178,557; Craig Spence, CP, Operations and International: $202,762; Timothy Fortune, Senior VP HR: $214,969.
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