Minnesota Orchestra CEO Michael Henson saw two massive bonuses as he was planning for his musicians’ major work stoppage, totaling $202,500.
This information comes courtesy of the 990 that covers the time period between 1 September 2011 and 31 August 2012. It was recently quietly posted on Guidestar.org. This document is not on the Minnesota Orchestra’s website, so you will have to go to Guidestar.org to see it.
Click to enlarge
Henson took home $386,916 in base compensation – $202,500 in bonus and incentive compensation – $9,800 in retirement and other deferred compensation – and $20,097 in non-taxable benefits for a grand total of $619,313.
Here is the explanation on the 990.
Click to enlarge.
Michael Henson’s bonus amount in Part II, Section B, Column 2 consists of bonuses for two separate fiscal years that were paid in the same calendar year. The bonus for fiscal year 2011 was paid in March 2011 and the bonus for fiscal year 2012 was paid in December 2011. Per IRS regulations, this schedule was filled out based on the calendar year 2011.
For comparison’s sake, here are some other American orchestras by budget – their expenses – who their executive directors are – how much they were compensated – and what percentage of the budget their compensation is.
Here are orchestras who haven’t yet publicized their 2012 990. This is from FY 2011.
Los Angeles Philharmonic – $103,925,230. Deborah Borda – $1,602,228 – 1.5%
New York Philharmonic – $68,400,555. Zarin Mehta – $887,401 – 1.3%.
And here are orchestras who have publicized their 2012 990.
Boston Symphony – $85,844,758. Mark Volpe – $622,938 – 0.7%
Chicago Symphony – $80,055,672. Deborah Rutter – $577,189 – 0.7%
San Francisco Symphony – $78,338,012. Brent Assink – $638,857 – 0.8%
Philadelphia Orchestra – $57,182,000. Allison Vulgamore – $610,446 – 1.1%
Cleveland Orchestra – $51,298,527. Gary Hanson – $584,498 – 1.1%
St. Louis Symphony – $26,597,756. Fred Bronstein – $394,572 – 1.5%
Houston Symphony – $25,817,059. Mark Hanson – $295,979 – 1.1%
Baltimore Symphony – $25,116,360. Paul Meecham – $261,843 – 1%
The Pittsburgh Symphony, Dallas Symphony, and Indianapolis Symphony were in a time of leadership transition so I left them out.
The Minnesota Orchestral Association’s expenses were $32,908,241. Mr. Henson’s compensation was $619,313… or 1.9% of expenses, roughly double the rate of other orchestras.
Edit, 1pm: The entry was altered. I – and my proofreaders! – made a (rather embarrassing) decimal error in calculating the percentages above. Apologies. But the point of the entry still stands.
As everyone who has been following the lockout knows, the Minnesota Orchestra posted a six million dollar deficit in FY 2012. Michael Henson’s compensation and bonuses would account for a full tenth of a six million dollar deficit.
***
OK, I’m done doing my imitation of a reporter. Bring on the completely unprofessional reaction GIFs.
Questions:
What performance is Mr. Henson being rewarded for?
How common is it for non-profit arts organizations in dire financial straits to hand out massive bonuses?
What is he getting paid now?
If the board is acting so irresponsibly about finances now, what other things have they done irresponsibly? How can anyone trust this organization to use dollars wisely and prudently?
In short, what flavor Kool-Aid is the Minnesota Orchestra board of directors drinking? It must be awfully delicious.
Song of the Lark 
I hope the board can explain to us how Michael Henson is deserving of a massive bonus as the same time that he is limiting revenue by slashing the number of concerts offered. We are waiting……
Wait — MOA’s whole point was that Minnesota can’t afford to pay its musicians at the top-tier. So why do we pay its administrators at that level?
Are the board members of the Minnesota orchestra just a bunch of lemmings, ready to go over the cliff with their illustrious leaders or are they willing to stand up to Henson, Davis and Campbell and call an end to rule by cabal. What kind of power do these people have over the board, the Mayor of Minneapolis and the Governor. What percentage of the 6million dollars deficit are operating expenses and musicians wages and what percentage was used up in other nefarious schemes and payments. Is there more dirty linen to be uncovered? The musicians wages have to be a very small part of the six million deficit.
Where any tax dollars used to support the orchestra? If so, then taxpayers should have a say in the management.
Well done again Emily! This is the most disgraceful news posted to date. Obviously our variety of Banksters are running the MOA like a bank!
This much more damaging, than the domain name fiasco.
On a serious note, I have not heard of any moves to form a proper responsible alternative organization. We need to know soon, before the enthusiasm dies, if the musicians will pledge to a new organization, or if they want to kick the dust of Minnesota off their shoes and move on.
If the latter then the Minnesota orchestra is done, and we move ahead without a full professional orchestra or we start from scratch.
I think when other media pick up and verify your post, the MOA is effectively done.
I would like to see Vocal Essence cancel or move their concert from Orchestra Hall.
I do think that the mayors, governor and legislators need to vigorously call for the entire board’s resignation now, and really pile the pressure on them.
We now, I think, have grounds for removing the 501 3C status from the MOA.
Lawsuits may also be in order for lack of fiduciary responsibility with donated funds. It really is time to turn up the heat on them now. They want a reset, well its time for others to enforce one. They are sitting back like untouchable grandees. This needs to change and we need to poke holes in the facade to explore for their vulnerabilities. They are always there.
As per their website, the musicians are not resigning. They are, however, creating their own season, which…who knows…may eventually end up being the birth of an independent ensemble. But if there’s any chance of re-uniting with the assets of the MOA, minus the corrosive leaders at the top, they want to keep that chance in play. I don’t blame them.
And don’t worry, Vocal Essence has indeed moved their concert from Orchestra Hall.
I think, in those blithe, halcyon, pre-lockout days that it probably made sense to the board to reward their hard-working minion for his shrewd, diligent labors getting all the ducks in line for the coming knock-down. My goodness, I’m sure he worked hard getting everything in order for his masters; you want to begrudge him his budget-busting bonus? What’s a fella gotta do to earn some tribute in this town?
Right? I mean, all the work he went to in helping get those domain names bought up, in meeting with Detroit’s management to discuss how to destroy an orchestra, probably staying in the swankest hotels while he was there…It takes WORK to bring down an orchestra of this caliber, you guys!
Couldn’t agree more!
Dr. Carter, and Sagrid Edman, re: your comment about the mainstream media picking up this information and verifying it—all I can say is good luck with that. As you might recall, SOSMN tried to get the mainstream media to pick up the “domaingate” story for four days — and it didn’t show up in the mainstream media until Emily’s blog became a firestorm. Moreover, most of the Star Tribune’s articles (at least since Graydon Royce’s bombshell article about the 2009 Board minutes) have been clearly biased towards the MOA management and Board, with the Board leaders having private meetings with the Strib editorial Board. No surprise there because the Strib’s CEO Michael Klingensmith sits on the MOA Board. There are also MOA Board connections to significant contributors (Wells Fargo) and Directors of MPR (Nicky Carpenter). So there is a reason why when Alan Fletcher from the Aspen Music Festival comes to town and says that the lockout of the MN Orchestra musicians must end unconditionally neither the MPR or the Strib coverage mentions this point. Just sayin’…
Yes, I am aware that there are many connections from the Board to the media in the Twin Cities. It was obvious from what was written in the newspapers and what came out from other sources. I just think that a real investigation is in order and there has to be someone with deeper pockets than mine who would support an evaluation of what has really gone on. I have no connections to the Orchestra or board except for being a ticket holder and occasional contributor. But, from what I have read, I am very suspicious that here is more to the story than we have heard.
RE: Collusion between newspaper and orchestra board:
This is how the executive business class works with the news media; they work together…especially so in a small media market. Reminds me of the Rosenberg Affair in Cleveland. (Long time music critic reassigned (now let go) after orchestra intercedes privately to expresses concern with relentless, withering criticism of music director.)
There MUST be someone in the area who has some clout to accomplish the goals you mentioned. Please STEP UP if you are that person.
I am waiting for some investigative reporter who is from a neutral organization to report on all the finances of the orchestra and board. How were funds invested? Is there conflict of interest involved in who did the investing and who the supervisor of the funds was. Are there close family or friends involved? Why did Henson say now that Vanska has left we have some breathing room left before reopening negotiations (?). Why the wait? What are they trying to hide?
Thank you once again, Emily, for your wonderful work. This is salt on our gaping wounds. I join with Mark in calling for some real pressure from the movers and shakers in our community to bring action against this board.
I think you need to re-examine your math.
Done. Thank you.
Yes, the decimal places in your figures are way off, but the proportions you calculated are correct, as is your ending observation, Emily. For example, with the LA Philharmonic, $1,602,228 is 1.5% of $103,925,230, not .015% and with the MNO, $619,313 is 1.9% of $32,908,241, not .019%.
Yup! I corrected this. Thanks much for your sharp eyes, dear readers. What would I do without you?
Wow, in the time since I loaded the page, everybody has noticed the same thing… you can just delete my comment!
Nope, that’s fine! I like to leave this stuff here so people know that:
A) despite very hard work, I do sometimes make mistakes, so please always be on the lookout for those, and please hold me accountable.
B) I strive to be as transparent and honest as possible.
and
C) I have fabulous readers.
I’m glad this is being discussed, but the percentages you posted should be 1.5%, 1.3%, .7% etc. Your currently posted percentages make the compensations look insignificant in comparison to the orchestras budgets
You are absolutely correct and I and my proofreaders apologize heartily! The error has been caught, noted, and rectified.
Unfortunately, I’m not perfect. :)
Practically perfect in every way, just like Mary Poppins!
Nauseating but not surprising. If I may chime in with a plug for a petition that’s circulating:
http://www.change.org/petitions/minnesota-orchestral-association-resign-from-the-board-and-management-of-the-minnesota-orchestra
The MOA board should be as transparent and quick to address errors as you are.
Dear Emily,
You are nearly perfect and we love you!
Are you kidding me? Michael Henson was paid more than Deborah Rutter of the Chicago Symphony which has a budget almost 2 1/2 times that of the Minnesota Orchestra! No wonder the Chicago musicians were given a raise at the same time Henson was attempting to force drastic cuts on the Minnesota musicians. And no wonder Ms. Rutter had critical words about Henson’s lockout.
Whatever the math, the basic problem here is what Henson and the Board have done to the finances of the Minnesota Orchestra, beginning with the endowment, once sixth largest in the nation. For those interested in a parallel case, the collapse of the NYC Opera Company, I recommend today’s (Saturday, October 12) edition of the NYT. On page one of the Business Day Section B1, the headline of the left hand column, always the highlight opinion column, the headline reads, “A Ransacked Endowment at New York City Opera” over a column by one of their best financial columnists, James B. Stewart, who analyzes the way “Management raids a $51.6 million fund to pay the bills.” Does this sound familiar? Where are the financial journalists in Minnesota who are prepared to investigate the management of the Minnesota Orchestra endowment with the same rigor that James Steward has applied to the mismanagement of the New York City Opera’s endowment? Are there parallels in methods of ransacking? At least our press needs to look into the possibility. Or, heaven forbid, are they being intimidated?
I don’t understand the timing of these bonuses. The bonus for 2011 was paid in March 2011, but the bonus for 2012 was paid not in 2012, but Dec. 2011. 990 covers from 9/11 to 8/12, but reports the bonus in March 2011 but before the period. Should the bonus for 2012 be counted in Henson’s salary for year 2011? Even without counting the 2012 bonus in year 2011, his salary still seems comparatively high. How much did he make in 2012? Did he get a bonus in that year? Or did he already receive that in 2012? Did he get a bonus in 2013?
There’s some skulduggery here related to 2012’s books. Of course the board would recognize that Henson earning a bonus in 2012 might not pass the smell test in lockout year 2013. Look for another double-bonus year in 2014 reported in 2015.
Michael Henson received bonuses of $202,500 just before the Musicians of the Minnesota Orchestra embarked upon over a year of 0 dollars. You would think that the mainstream media in the Twin Cities would pick up on this despicable story.
Governor Arne Carlson was an excellent State Auditor before he was governor. Perhaps he would assist in looking into this situation, and assemble a team of independent legal and financial advisors to investigate. I’d also recommend they look into the rules of IRS 501(c)3 organizations, and the role of board members as stewards of the community’s assets.
How can you expect a high profile executive to get by on $386K? Living in the Midwest is expensive and running orchestra into ground is hard work even if you are only assisting your board of directors in that effort (and union busting is always rewarded.) Or, it may be that with the the lock out there isn’t a lot to do – the bonuses may have been necessary help him maintain his self worth or compensate for the guilt that comes with destroying an institution. I don’t think you have considered these important factors.
….also interesting: It seems Hanson in Cleveland got a big raise and Vullgamore in Philadelphia took a cut (compared to old figures I had on hand.)
Brava!
I sent this on to my state representative…
Don’t forget that there were MO staff lay-offs that year. I wonder what the combined total of those laid-off staff salaries would be. Did Henson cut people’s jobs to create a false impression of financial difficulties?
YES. This.
It appears these bonuses happened just before several low-level staff were laid off. These bonuses are probably equal 4-5 (or more) staff members’ salaries combined.
What an interesting observation. It’s fascinating that Mr. Henson was prepaid a bonus for the upcoming year and then, a mere 5 months later, a nice little chunk of the staff was laid off.
I’m waiting for a musician’s union-hating Libertarian economics-loving troll to crash this party (that is, if one can possible label this story about such scandalous news “a partyl”
I love the suggestion to write to our representatives. I just did the same, and here’s what I wrote:
I am a constituent, and a very active community musician who is extraordinarily concerned about the situation with the Minnesota Orchestra musicians being locked out. I am not a union member, but I am a serious lover of classical music, and this entire situation is and has been a travesty!
One of the individuals who has been actively engaged in the situation is a blogger named Emily Hogstad, writing under the title of “Song of the Lark.” I am forwarding her latest posting to you.
Her latest revelation that huge bonuses were being given to the administrator of the Orchestra, at a time when the musicians were being locked out, is obscene and unconscionable. This is yet one more example of how the Board of the Minnesota Orchestra has acted with extremely questionable decisionmaking, as it comes to this revered cultural institution.
I am so very frustrated at this whole situation, and something needs to be done. I am turning to you, as my elected representatives, for help to resolve this situation. I know that the governor has been a little involved, and the mayor of Minneapolis to some extent, but nothing is working. And this latest bit of news says to me that there truly are some serious questions of malfeasance going on in the orchestra board, and there doesn’t appear to be anything anyone can do about it. I find that amazingly hard to believe. If that really is true, we need some new laws in Minnesota to protect our cultural institutions from destruction by incompetent and callous volunteers in leadership positions.
Please help. One idea that comes to my mind is to initiate a special investigation of the MN orchestra situation. I know one has been done by the Legislature already, but it had to do with state funding involvement. The idea i have in mind is to look into the preservation of, as well as the prevention of, the destruction of a treasured cultural resource of Minnesota for 100 years, and how we can protect and preserve it.
Thank you for your consideration,
You’re tuned to WMOA – where THE HITS JUST KEEP ON COMING!!!!!!
Michael Henson fully deserves this bonus. After all, he did a great job orchestrating the deficit and showing the need to reset the business model.
I think one can assume Henson got his bonuses because things, including the lockout, have gone PRECISELY as the Board wanted. In the DC area where I grew up, we had two major teams vanish (one literally in the dead of night) because the owners got better deals elsewhere: the Senators became the MN Twins, and the Baltimore Colts became…well, I don’t follow football so I don’t care what they became.
I don’t know what the MO is going to “become,” but you can bet it’s been discussed in those Board meetings. You can almost see them sitting there in their t-shirts that say “WE, not the musicians, are the Minnesota Orchestra!!!!”, high-fiving each other over a coup well-done.
For a nonprofit arts organization to fire all the artists, retain the management (AND a huge endowment), as part of their definition of their “mission,” leaving them with no one to actually do the “art,” has to be unprecedented. I’d have thought that fact alone would be worth major media attention. Alas, I guess if “labor” or “unions” are involved, it’s not worth the media’s time.
Does anyone have any idea what the board is planning? any leaks or scuttlebutt?
I just want to throw this out there for discussion–and I know that on Song of the Lark, it will be discussed!! I wonder if it may be time for a consistent picketing presence at Orchestra Hell – er, Hall. Campbell has commented that in regard to negotiations, the time pressure is off (lovely) and it appears that MOA is “hunkering down” (to try to run out the union’s clock.) In the meantime, I observe frequent meetings and receptions occurring in the new space (I work downtown.) Subtle but persistent picketers would remind management, and patrons (and potential patrons) of the new space that all is not calm and bright. With the many constitutencies involved (LOMOMO, SOS, etc.) it seems like it should be possible to coordinate and field a small contingent (even 3-4 people) most afternoons/evenings. Just sayin’ . . .
Is the Board waiting for the public to forget about the issues and the orchestra musicians, so they can go ahead and use the space for a rental venue? The longer the issue is out of the public eye, the easier it is to move ahead with other plans. I still wonder what they are trying to cover up in the financial realm. Who is strong enough – or courageous enough – to delve into this unhappy situation?
At what point would going down such a path create issues with charitable trust law by significantly shifting the use of those donated funds from the purpose for which they were donated (namely, support of an orchestra)?
I think the Board just wants the musicians and conductor (check) to resign, so they can happily go about hiring low-cost replacements. They’re prepared to hold out as long as it takes, since they have a new “fortress” and a huge endowment they can burn through. They consider themselves untouchable, and so far it appears they are.
I should clarify my last comment as “the Board leaders,” since I’m sure there are Board members with good intentions, but apparently they just don’t have much power.
I’m sorry, but if the other board members were not aligned with the strategy that is in place, we surely would have heard something from them by now. By their inaction, they are signalling their support for the current status quo. Very sad.
They have mouths. They could talk. They could tell us what’s happened/happening. That’s the most power of all.
While it is obvious that there is plenty of bad blood between management and the musicians.. and heads will have to roll before this is resolved. Is anyone on the musicians side willing to admit the $ just isn’t there.. and that vilifying, picketing, and otherwise poisoning the well isn’t going to make more of it.
I think that the MOA has poisoned the well for the money that COULD have been theirs in the past or COULD BE theirs in the future. It’s hard to get away from the issue that many community supporters of the Orchestra do not trust the MOA management with their contributions (which helped build that Hall renovation). And with that huge endowment, it’s not at all clear that there isn’t the money or some way to go forward. I’m not convinced yet.
And if the MOA REALLY cared about the world-class Minnesota Orchestra that we had and Osmo, it’s hard for me to believe that they would not have found a way to make things work. That’s their job, and some people on the board are worth billions… so… that 6 million dollar projected deficit could be covered while the organizations’ management regrouped and regained the trust/transparency the community needs to continue supporting it… But apparently, the MOA Board ties and a new building with their names all over it are more important than the orchestra itself.
And now that we know the Hall is owned by the City of Minneapolis, and not the MOA, (although I’m wondering why we didn’t know that sooner?), maybe there is room for change to take place, such as the bill that Rep. Phyllis Kahn is proposing to create a new group. Another question I have now would be how would the new group be able to have the endowment fund transferred to them? Along those lines, how much of the endowment is in the hands of Wells Fargo and US Bank? Anyone thinking of conflict of interest here if this is the case? More to investigate. Just sayin’.
I have said before on this line of comments, that I am very interested in why the board is delaying any further attempts at negotiation. What are they trying to hide? Just as Wendy L. says, are the funds in certain banks? What might be the conflict of interest in how the funds have been handled? What do other board members know about the financial arrangements? Who is the courageous investigator that could dig out these facts? The longer the impasse goes, the more the issue will be forgotten. What might be happening in the background? I am certain that the full story of the board’s plan is not known.
I think if you could turn the clock back a couple years, if management had been completely transparent about the finances, and had started working with stakeholders to increase revenue streams, the musicians would have been perfectly willing to take reasonable cuts. However, after the insulting initial contract offer (with some 250 work rule changes, some of which were ridiculous, like taking away hiring decisions from Vanska), the complete lack of transparency regarding finances, and then the heavy-handed negotiation tactics, the musicians were really left with no choice but to fight for BOTH the artistic and financial sustainability of the orchestra. And that’s what we patrons are fighting for now, too.
And now we hear that Michael Henson’s inspired leadership has lost the
Orchestra a residency at the 2015 Proms in London. The orchestra was to have performed a Sibelius cycle.
. . . and that the 2015 Proms residency would have been the first time an American orchestra has been invited to do so.
Folks, if you live in Minnesota, contact your representatives in the state house and senate and voice support for Phyllis Kahn’s proposal re: public ownership of the Minnesota Orchestra. Get some real heat going under management.
Speak to me, Michael, about your great personal success! 25 year veteran of the former Mn orchestra.
So is none of the mainstream press going to pick up this story? That seems even more scandalous than the “CEO bonus scandal” itself!
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This story is finally in the Strib after appearing on Minn Post.
Also Rep. Alice Housman wants to take control of Orchestra Hall from the board. That is an excellent idea we all need to get behind.
I wonder about the endowments. Surely previous patrons endowed their money to MO and not MOA? So if there is no MO/MOA relationship, would the endowments revert to the ‘new’ MO, or the treasury, or the MOA? Surely the MOA are just paper-pushers between the endowments and the group (MO) it was endowed to?
But perhaps some of the wills and endowments were not clear on this matter, not envisaging such destruction of the orchestra they loved and wanted to help see a bright future for.
The ‘sack employees to pay for boss bonus’ has been going on for a while in corporate-land, but that it is creeping into the arts world is creepy. It indicates that some people only see art as a money-making business, and if it’s not making bigger and bigger profits year on year, then it should be subject to the same ruthless mal-treatment of employees that other industries have received. Would operating as a ‘not for profit charity’ work better?
For anyone who hasn’t seen it, there is razor-sharp summary and analysis of the MOA’s anti-artistic goals and strategies on the polyphonic blog–very much worth a read:
http://www.polyphonic.org/2013/10/30/bringing-down-the-sky-from-great-to-good-in-minnesota/
This is an excellent analysis of the MOA Board and its objectives, explaining why every moment of silence plays into the hands of these middlebrows. The only hope is to support the politicians who might have a chance at saving the great MO.
This is entirely off point as to Henson’s bonuses–BUT–has anyone noticed how Minnesota Public Radio does NOT promote (well, in fact, makes absolutely no mention of) the LOMOMO’s self-produced concerts? Anybody know–is this perhaps because of contractual arrangements between MOA and MPR? Also–notice how there was much sensitive commentary on MPR at the time of Maestro Vanska’s farewell concerts, and extensive talk about negotiations to rebroadcast same–and then, suddenly, absolute silence in that regard?
Quite right. There is reason for suspicion. The actions of the MOA, including management of the endowment (see the comparison with Cleveland) and the Board’s commitment to union busting no matter what, have never been seriously questioned by MPR, the Star Tribune or even MinnPost, although, as George Slade has noted, there is reason to suspect some financial skulduggery going on. No correspondent has dared to look into it. For example, while questions have been raised over the legislature’s approval of $14 million in bonds to construct additions to Orchestra Hall, no one has raised questions about $15 million in tax free bonds (non profit) issued by the City of Minneapolis for the same purpose. These bonds were underwritten by Wells Fargo and US Bank. Who is left to look after the interests of the customer victims of the lockout and their exclusion from Orchestra Hall? Only Phyllis Kahn, it seems. As for MPR, luckily there are tapes of the Saturday broadcast. If MPR does not come through with the promised CD of the farewell broadcast, then maybe it is time to reconsider sustaining memberships in Classical MPR and go underground. Trust has been a casualty of this crisis in too many ways.
Interesting observation. I’m a member of MPR, but maybe we need to make a point there as well, with our lack of future financial support and raising these questions?
I listen to MPR all day at my office–and, to be fair, I have to chime back in that mention of the December concerts was made this morning by John Birge on MPR–but that’s the first I’ve heard in a long time!
On Monday, I commented on the MPR FB page about the lack of replay of the Osmo Vanska final performance, as well as no mentions of the concerts by the Musicians of the MO. Maybe it nudged them along a little. I also heard it at 9 a.m. this morning.
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