New York Library Officials’ Pay? Shhh

NY Times
November 19, 2006

By SERGE F. KOVALESKI

Three years ago, the New York Public Library — the city landmark with 50 million books and other items in its vast collections — declared itself in some financial distress.

At a news conference with Mayor Michael R. Bloomberg , library officials unveiled what they called an emergency campaign to raise $18 million in private money to deal with cuts in city and state financing and a multimillion-dollar endowment diminished by the tough economic realities after the 9/11 terrorist attack.

The library eventually sold off an Upper East Side apartment it owned for nearly $3 million, and later, to the dismay of some, had 18 works of art from its collection auctioned off for $52 million to help shore up the endowment. Most recently, the library, citing budget constraints, reduced its tuition assistance program for its employees.

But across those years, the financial tribulations at the library were not reflected in at least one significant way: the compensation received by some of the institution’s top officers.

The library’s most recent federal tax filing shows that the total compensation for Paul LeClerc , the library’s president and chief executive, had increased to more than $800,000, a jump of more than $221,000 from just a year earlier.

During 2005, the library also hired three officers who were paid substantially more than the people they replaced.

One of those newcomers, David S. Ferriero , the director and chief executive of the institution’s research libraries, received compensation of $349,066 that year, nearly $118,000 more than his predecessor’s annual salary, according to records and interviews.

Samuel C. Butler, chairman of the compensation committee of the library’s board, said the compensation for Mr. Ferriero that year included a reimbursement for part of the cost of moving his family to New York .

And another of the newly hired managers, Susan Kent, the director and chief executive of the branch libraries, was given a compensation package of $302,484, or about $59,200 more than the person who had that job the prior year, the tax documents show.

The records also show that Catherine Carver Dunn, the library’s senior vice president who is involved in fund-raising and communications and handles government relations, was paid $322,729 — an increase of nearly $90,000 within four years. Library officials said that during that period her responsibilities were expanded.

Mr. Butler, who was chairman of the library’s board through 2004, said in a telephone interview last week that the increases for the officers were necessary to bring the library in line with comparable nonprofit institutions that have budgets of similar size.

Mr. Butler said that at the heart of the generous compensation arrangements was the need to attract and retain top-flight managerial talent at the library, an institution that he described as unique and complex. He also said the library’s finances had improved of late.

The library — which has a budget of about $300 million and an endowment of around $660 million — has 90 locations in Manhattan , in the Bronx and on Staten Island .

Through a library spokesman, Dr. LeClerc , who has been president of the library since 1993, and Catherine C. Marron , its chairwoman, declined to be interviewed. Instead, the library arranged for Mr. Butler to be interviewed.

Last week, The New York Times called more than a dozen of the library’s other board members about the officers’ compensation. But they either did not return calls or would not comment on the matter. Asked about the compensation, one of the trustees, David Remnick , editor of The New Yorker, said, “I’m not going to talk about it.”

Jane Silver, president of the Irene Diamond Fund, which in 2003 and 2004 gave the library significant donations, though not specifically in response to the emergency drive, said that she did not know about the compensation increases given to officers.

“I think it is my job to be aware of the financial situations of our grantees because that plays a role in our decision-making,” Ms. Silver said.

Mr. Butler said the compensation committee had reached its decisions about the salary increases after reviewing financial information about comparable institutions, which had been compiled by a paid consultant. Mr. Butler declined to identify those institutions.

As for the new compensation package for Dr. LeClerc , Mr. Butler said: “While we were certainly watching every single penny, we thought he was worth the increase. The board thinks he has done a simply fantastic job, and we do not want to lose him.”

Dr. LeClerc came to his position at the library from the presidency of Hunter College . His contract with the library, which was expiring in 2004, was renewed for five years. His responsibilities include leading fund-raising efforts and negotiating the city’s contribution to the library’s budget.

Under the new terms, Dr. LeClerc’s salary increased in fiscal year 2005, which ended June 30 of last year, to $464,170 from $356,512, according to the library’s tax documents.

He also received $136,110 as a housing allowance. But Mr. Butler said that because Dr. LeClerc owns his apartment in Manhattan, the money was effectively an addition to his salary.

Other payments, like deferred compensation and a retroactive salary increase, made the total annual package worth $813,345.

Mr. Butler also said that Dr. LeClerc and other officers of the library had recently received further enhancements to their compensation, but he said he would not reveal what they were. He said that until formal tax documents were filed, the size of the additional increases were “private, confidential information.” Dr. LeClerc’s compensation is not paid from public funds, library officials say.

In the world of charitable organizations and major public-private institutions, executive compensation has grown sizably in recent years. Those who defend the increased salaries contend that such costs are dictated by the marketplace for the most talented and expert people. Others, however, have complained that the often quite lucrative pay — while opaque to donors, large and small — has become excessive.

A survey of compensation for nonprofit executives that was featured in the September issue of The Chronicle of Philanthropy showed that Dr. LeClerc’s salary of $464,170 was significantly less, for instance, than that of Glenn D. Lowry, director of the Museum of Modern Art. Mr. Lowry’s compensation for the same fiscal year, excluding benefits and expense allowances, was $875,301, according to the magazine.

But in the category of museums and libraries, Dr. LeClerc’s salary was considerably higher than what James Cuno , the director and president of the Art Institute of Chicago , took home that year. The survey reported that Mr. Cuno’s compensation was $323,531.

Comparisons aside, it is clear that the New York Public Library was facing a somewhat tough and perhaps unusual set of financial circumstances several years ago. Fund-raising, one of Dr. LeClerc’s chief responsibilities, was off; and the economy, still recovering after 9/11, was somewhat sluggish.

In the library’s 2003 annual report, Mr. Butler, who was then chairman of the board of trustees, and Dr. LeClerc wrote in a joint letter that the library was struggling through “what is — and could remain for some years to come — one of the most challenging periods in our long and distinguished history.”

Some of the actions the library took to address the situation, though, caused dismay.

Some art experts argued that the selling of artwork, including the library’s star painting, “Kindred Spirits,” an 1849 Hudson River School landscape by Asher B. Durand, was akin to jettisoning part of the city’s cultural patrimony. And the prices that some of the pieces of art brought were less than their estimated value. The library said at the time that paintings and sculptures had never been a major emphasis of its collections and that it was not a museum.

Lynn Taylor, president of local 1930 of the New York Public Library Guild, which represents 1,700 workers at the institution, said that she was bothered by the reductions in the tuition assistance program. The union, she said, has filed a grievance with the library.

Dr. LeClerc , anyway, would feel little if any of the financial squeeze caused by the library’s budgetary predicament. The compensation committee unanimously approved the new five-year deal.

Mr. Butler recalled that during the negotiations, Dr. LeClerc was concerned about the financial health of the library. “The committee took all that into consideration,” Mr. Butler said. “We did not put him at the top of comparable institutions.”

Little information about the negotiations or hirings was made readily available to the public, or to the library’s many donors.

Jon Small, the government relations consultant for the Nonprofit Coordinating Committee of New York, an educational and services organization for the nonprofit sector, said that state and federal laws require that compensation for executives of nonprofit institutions be reasonable. That is tested by assessing similar positions at institutions of “comparable size and complexity,” he said.

“These laws are intended to prevent people from receiving compensation they are not entitled to based on the services performed,” said Mr. Small, who offered no opinion of the library’s decisions. “Obviously, there is a certain degree of vagueness within these parameters.”

The city’s financial support for the library amounts to more than $100 million a year, library officials say.

Stu Loeser , chief spokesman for Mr. Bloomberg, said on Friday, “The mayor through his experience on about 20 nonprofit boards and as chairman of Johns Hopkins University believes that the public and nonprofit sectors need strong management, and they should pay for it.”