Putting Michael Henson Under the Microscope

This February, Minnesota Orchestra CEO Michael Henson was thrust into the international spotlight like never before. He became a recurring character on Norman Lebrecht’s widely read blog Slipped Disc (“Michael Henson and his board continue, against all logic, to defend their lockout” – “a cultural tragedy, scripted by a pair of tough-talking boards and feeble managements” – “we have received a recording of Michael Henson’s stumbling appearance before the state legislature in Minnesota“). Alex Ross of The New Yorker opined, “The management and board in Minnesota need to think long and hard about what they are doing.” On another New Yorker blog, Russell Platt wrote that “Michael Henson, the Minnesota Orchestral Association’s C.E.O., seems determined to put his foot in it.” Orchestra blog Adaptistration ran a “Most Bush League CEO” competition, which Henson won by a country mile (as of this writing, with 77% of the vote). Closer to home, MinnPost was critical of the attitude Mr. Henson took regarding the neutral Grammy concert put on by Mayor Rybak and Judy Dayton, and state legislators were obviously skeptical of Mr. Henson’s testimony.

Especially in light of the massive cuts in compensation that Mr. Henson is proposing for Minnesota Orchestra musicians (thirty to fifty percent), many of my readers have wondered if he has also taken substantial cuts. So I ran some numbers for you…

Some notes:

• This is total compensation, not salary.
• 2004 is blank because the transition between David Hyslop and Tony Woodcock skewed the numbers.
• 2007 is low because Mr. Woodcock left the MOA in the middle of that fiscal year (March 2007).
• 2008 is low because Mr. Henson began working at the MOA in the middle of that fiscal year (February 2008).
• FY2012’s numbers are not available yet.
• Between 2006 and 2011, the compensation of the CEO of the MOA increased by 14%.
• I am not seeing any 30-50% cuts.

Some readers have asked me how Mr. Henson’s salary compares to musicians’. We’ve heard nothing about Mr. Henson taking a substantial cut in compensation, so I’m assuming he is planning on taking home roughly $389,861 in the years to come. In the following graph, I use base salary to represent the musicians. Remember it is impossible to know what their average compensation is, since only a handful of musicians are represented on the 990. This comparison between total compensation and base salary is obviously problematic, but I feel it is better than nothing.

Put another way, in 2006, musician base salary was 27.5% of the CEO’s total compensation. The Henson proposal would bring this percentage down to 20%.

Many of you have asked how this compares to other orchestras in the industry…

According to this measurement, Minnesota seems somewhat in line, doesn’t it?

However, if you look at CEO compensation as a percentage of the organization’s total expenditures, the story changes. I prefer this measurement because it takes into account the organization’s budget. Indeed, this is the measurement that Charity Navigator uses in their summaries of various charities.

Notes:

• The “proposed” percentage is based on Jon Campbell and Richard Davis saying in an October Strib editorial that the Minnesota Orchestra’s annual expenditures can only be $26 million.
• If Mr. Henson would be interested in bringing his compensation somewhere in the middle there – say, to 0.9% of a $26 million budget – that would result in a total compensation of $234,000, which is a 40% cut. Ironically, that is what he’s asking many musicians for.
• It would also bring him more in line with other American non-profits whose budgets are between $25 million and $50 million. Here’s a Star Tribune article from October 2012: “For the big guns, nonprofits with budgets of $25 million to $50 million, the median CEO compensation was $243,000 at the top tier.”

So.

Would Michael Henson taking a 40% cut in compensation solve the problem the Minnesota Orchestral Association says it’s facing? If the MOA does indeed want to trim its budget by $5 million, a 40% cut in CEO compensation would get the MOA 3% of the way there. That would be a start. But perhaps more importantly, it would demonstrate a shared commitment to sacrifice for the good of the organization. It would send a clear message not just to musicians, but to the public, lawmakers, and the press…three groups whose trust and affection Mr. Henson has sadly lost.