Smithsonian to make large cuts to executives' pay

By Brett Zongker ASSOCIATED PRESS | Friday, August 29, 2008

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WASHINGTON — At least 17 Smithsonian Institution executives with six-figure salaries will see future pay cuts many in the tens of thousands of dollars under reforms adopted by the museum complex.

According to figures released recently by the Smithsonian Institution, the chief financial officer could see the biggest reduction. If the cuts planned for five years from now were made today, CFO Alice Maroni could lose as much as $120,000, or 41 percent of her base salary of $293,280. Others could see reductions ranging from $6,000 to more than $80,000 a year.

Nonprofit watchdogs and members of Congress have been questioning salaries at the Smithsonian since former Secretary Lawrence Small's compensation grew to nearly $916,000 for 2007. Small resigned in March 2007 when it was revealed he was also charging the Smithsonian for housekeeping and repairs to his home swimming pool, among other expenses.

Since then, the Smithsonian, which includes the National Zoo and the National Air and Space Museum, has commissioned independent reviews of its governance and compensation, established a code of ethics and made changes to its board structure. Many of Small's top deputies have resigned.

"Everyone will know that when you come here, it is public service," said Smithsonian spokeswoman Linda St. Thomas. "You are going to make less money."

The Smithsonian will wait five years to reduce the 17 executives' salaries to blunt the impact and prevent a mass exodus of leadership. The jobs were targeted because they were similar to federal government positions that pay less.

The federal government caps salaries for similar jobs at $158,500. When the Smithsonian looked at its books, it found 17 of 38 executives' salaries were over the cap. It's difficult to say exactly how much the executives will lose in 2013 because the federal salary cap will likely be higher then.

Exceptions will be granted for directors of museums and other posts, which require significant fundraising duties.

New Secretary Wayne Clough, who is one of those exceptions, receives total compensation of $524,000, which includes a base salary of $490,000 and $34,000 in retirement fund contributions.

The Smithsonian depends on Congress to fund about 70 percent of its $1.1 billion annual budget, though the highest salaries for top officials and museum directors are paid out of private trust funds.

Smithsonian General Counsel John Huerta, whose salary would be reduced, said his retirement next month had nothing to do with the cut.

"I believe the Smithsonian is in a good place now," Huerta said in an e-mail. "I do not believe the institution will have any difficulty filling my position at the reduced salary with top notch candidates."

Executives usually expect more salary stability in nonprofit and government jobs, said John Challenger, an expert on the workplace and organizational behavior.

"Any time you give someone a pay cut, it feels like a demotion. Some people leave," said Challenger, chief executive of the Chicago outplacement firm Challenger, Gray and Christmas Inc. "If you build a lifestyle on a certain level of income, it's hard to change."

Still, Challenger said these are jobs that people covet, in part because of the Smithsonian's prestige.

Critics aren't sure the Smithsonian has done enough. They question why Clough is paid more than the U.S. president, who earns $400,000 a year.

"One has to ask, what's the logic of paying Clough $500,000 and then paying the others so much less?" said Pablo Eisenberg, a senior fellow at Georgetown University's Public Policy Institute who studies nonprofit leadership. "I don't think that makes for very good morale among staff."

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