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APNewsBreak: Orange Bowl CEO got hefty pay bump
Question of the Day
WASHINGTON (AP) - The committee that runs the Orange Bowl bumped up its CEO's pay by nearly $150,000 in 2009, boosting his compensation to more than $500,000, according to a recently filed tax return.
Orange Bowl spokesman Larry Wahl said in an email that the increase was mostly supplemental compensation given to CEO Eric Poms for "the added work and effort involved" in hosting two Bowl Championship Series games in 2009, including the national championship, in south Florida.
The Orange Bowl is one of four premier college football games that also hosts the BCS title game once every four seasons, along with the Sugar, Rose and Fiesta Bowls. The Fiesta Bowl fired CEO John Junker last week over extravagant and improper spending uncovered by an internal report.
As a public charity, the Orange Bowl must list its highest compensated employees on its 990 tax returns, which are publicly available. Those returns show that Poms raked in $507,000 in 2009, a 42 percent increase over the previous year's take of $358,000.
Bowl officials wouldn't provide Poms' salary for last year, when the Orange Bowl did not host the BCS title game. Wahl said Poms' "total compensation for 2010 has dropped below the double-hosting level in 2009 and the exact amount will be reported when our next 990 is filed as required by the IRS."
The bowl also gave big boosts to three other top executives, ranging from 24 percent to 38 percent, according to an Associated Press analysis of tax returns.
Poms' pay still lagged behind Junker's $674,000, and Sugar Bowl CEO Paul Hoolahan's $645,000. But it far exceeded the $282,000 paid to then-Rose Bowl executive director Mitch Dorger. The annual compensation for Dorger's replacement, Scott McKibben, has not yet been reported on a tax return, but McKibben told the AP that his base salary is $425,000, and could be higher based on a bonus program. He added that the Rose Bowl also provides additional compensation to employees in the years it hosts national championship games.
The Sugar Bowl says that its CEO can receive a bonus based on meeting specific criteria and the bonus can be higher in a year when it hosts the championship game, but it's not a given. The Fiesta Bowl did not respond to a request for comment.
John Colombo, a law professor at the University of Illinois at Urbana-Champaign and an expert on tax-exempt organizations, said that $500,000 for the CEO of an organization the size of the Orange Bowl didn't strike him as out of line.
"The real question for tax purposes is whether the salary is reasonable in the context of the market for this kind of work," he said. "And that would include not just the tax-exempt market, but also the taxable market. So we're really looking at the market of CEOs that run businesses about the size of the Orange Bowl."
Wahl said that the supplemental compensation was based on a written plan that included meeting goals and milestones.
"It involves both internal (employee performance assessment) and external (marketplace surveys and comparatives) reviews," he said. "Efforts are led by a compensation committee appointed by the Orange Bowl's board of directors."
Wahl also said that the Orange Bowl made a $3.15 million contribution in 2009 to rebuild an inner-city youth/high school stadium and facilities at Moore Park in Miami.
Besides Poms' pay hike, several other Orange Bowl officials also got bumps because of hosting two games in 2009, including:
_ Chief financial officer Brian Park, whose pay increased 28 percent from $200,000 to $257,000;
_ Then-chief marketing officer Christina Francis, up 24 percent from $203,000 to $251,000;
_ Chief operating officer Michael Saks, who jumped 38 percent from $185,000 to $255,000;
In recent years, the top bowls have faced sluggish ticket sales and lukewarm ratings for games when they don't host the championship. The attendance at this year's Orange Bowl between Stanford and Virginia Tech, for example, was about 9,000 below capacity at Sun Life Stadium, as neither team came close to selling its allotment of 17,500 tickets. The most recent tax return shows the Orange Bowl lost $22,000 in the fiscal year ending last April 30, compared to a surplus of $6.4 million the previous fiscal year, when it hosted the championship game.
Wahl chalked up the loss to a "difficult economy for all events across the country."
Also, FedEx Corp. dropped its sponsorship of the Orange Bowl last year after two decades, and was replaced by Discover Financial Services.
Playoff PAC, which has challenged the Orange Bowl's tax-exempt status to the IRS, argued that Poms' pay wasn't justified.
"There's a disconnect between payment and performance there," said Matthew Sanderson, co-founder of the PAC, which aims to replace the BCS with a playoff system to determine the national champion.
In a complaint filed with the IRS last year, Playoff PAC accused the Orange, Sugar and Fiesta Bowls of violating their tax-exempt status, while finding no irregularities with the Rose Bowl. In a supplemental letter to the IRS last December, the group took particular aim at a "Summer Splash" cruise to the Bahamas that the Orange Bowl hosted for athletic directors, conference commissioners and their spouses. The PAC called the trip a junket that was problematic under federal tax laws; the bowl said it was "100 percent in compliance with IRS guidelines."
Wahl, the Orange Bowl spokesman, said there will not be another Summer Splash or similar event this year. He said it's a periodic event and was not done in 2009, and was never planned for this year.
The Orange Bowl's latest tax return also shows it spent $1,000 lobbying the city of Miami Beach for an annual grant, and that the bowl received $627,000 in government grants.
"Of this total, only $168,750 is truly government grants from Miami-Dade County and the City of Miami Beach," Wahl said. "The balance was attributable to tourism agencies whose focus is to support events bringing visitors to the region."
Sanderson argued that the pay increases were "built on the back of public subsidies," citing those grants as well as obligations that the Orange Bowl (and other bowls) make for participating schools to buy thousands of tickets from game organizers. Theoretically, the school will then turn around and sell those tickets to its fans. But if the fans aren't buying, it's not uncommon that a school can get stuck with hundreds of thousands _ even millions _ of dollars' worth of unsold tickets.
"This wouldn't happen in an open, competitive system," Sanderson said.
AP College Football Writer Ralph D. Russo contributed to this story.
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