WASHINGTON - Securities and Exchange Commission chairman Mary Schapiro's current annual salary of $162,900 pales in comparison to her previous one as well as the salaries of the top officials of the self-regulatory organizations and industry trade groups whose members are regulated by the SEC.
At least nine current and former self-regulatory and industry group officials were paid more than $1 million in 2007 or 2008, according to the latest tax forms the groups filed with the Internal Revenue Service.
Schapiro's SEC paycheck does not even come close to matching what she received in 2007 as the head of one of those self-regulators, the Financial Industry Regulatory Authority, where she earned $2.503 million in compensation plus nearly $615,000 in benefits and deferred compensation. She received the highest salary of anyone working for a municipal market-related group in the survey that year.
In addition, Schapiro received a lump-sum payout between $5 million and $25 million from her retirement package when she left FINRA earlier this year, according to financial disclosures filed during her confirmation process.
The contrast between the current and former compensation of Schapiro as well as that of self-regulatory and industry officials is a stand-out in The Bond Buyer's 10th annual survey of the latest Form 990s filed by 21 nonprofit groups for fiscal years 2007 or 2008.
After Schapiro at FINRA, Timothy Ryan, president and chief executive officer of the Securities Industry and Financial Markets Association, received the second-highest level of compensation among groups with ties to the muni market, at just under $2 million, plus $24,157 in deferred benefits and deferred compensation for the fiscal year ending Oct. 30, 2008.
Ryan was hired in January 2008 to succeed Marc Lackritz, the group's retired CEO. SIFMA's 990 also reveals that Lackritz, who retired in December 2007, was paid $1.25 million in compensation plus $1.31 million in severance for fiscal 2008. Part of the $1.25 million figure is attributable to services provided to the industry group and partly to contractual obligations, a SIFMA official said.
In addition, SIFMA reported that Micah Green, its former co-CEO, received a severance payment of $275,000, the second such payment since he left the group in March 2007.
SIFMA had previously reported that it paid Green $1.10 million in severance on top of $244,594 in compensation during the fiscal year ending Oct. 30, 2007.
That same year, SIFMA also reported that paid its former chief financial officer, Donald Kittell, $991,666 in severance on top of the $876,385 in compensation. SIFMA's latest Form 990 shows that Kittell received an additional $637,619 in compensation and a second severance of $585,594. Kittell retired from the trade group in June, 2008.
SIFMA's most recent 990 also reported that its top Washington lobbyist, Scott DeFife, received $562,292 in compensation plus $33,709 in benefits and deferred compensation during the fiscal year ending last October.
The Wall Street trade group recently hired former U.S. Rep. Ken Bentsen of Texas to head its Washington office beginning next month, but his full compensation will not be reported for at least another year.
The survey showed that Lynnette Hotchkiss, the executive director and president of the Municipal Securities Rulemaking Board, received $564,472 in compensation, along with $73,052 in benefits and deferred compensation for the fiscal year ending Sept. 30, 2008.
The MSRB's 15 board members reported $731,250 in expenses and other allowances for travel. Frank Chin, the chairman at the time, had the highest expenses, at $75,000, and Donald O'Brien, the vice chair for most of the fiscal year, received $60,000. Eleven other members received payments between $45,000 and $50,000.
The MSRB's former general counsel, Diane Klinke, received $517,408 in compensation plus $52,427 in benefits and deferred compensation, while Thomas Hutton, the board's former chief information officer, was paid $233,085 in compensation and $30,127 in benefits and deferred compensation. Klinke and Hutton left the board last September.
Also among the other $1 million-plus earners was Douglas Shulman, former FINRA vice chairman, who made $1.48 million in compensation and $134,224 in benefits and deferred compensation. Shulman now heads the Internal Revenue Service.
Two other senior FINRA officials, Michael Jones and Todd Diganci, received $1.11 million and $1.1 million in compensation and $97,491 and $61,378 in benefits and deferred compensation, respectively. Jones retired from FINRA last year and subsequently became chief operating officer of the Public Broadcasting Service.
Paul Schott Stevens, president of the Investment Company Institute, earned $1.36 million in compensation plus $265,001 in benefits and deferred compensation for ICI's fiscal year ending Sept. 30, 2008.
Edward Yingling, president and CEO of the American Bankers Association, made $1.32 million, plus $963,377 in benefits and deferred compensation.
This year's survey again shows a sizeable gap between the salaries of industry group executives and the heads of state and local government groups, although many of the latter have topped $300,000.
Don Borut, the executive director of the National League of Cities, received a salary of $322,764 plus benefits and deferred compensation of $36,591.
In addition, William Heberton, president of the NLC Mutual Insurance Co., was paid $388,725 in compensation and $33,613 in benefits and deferred compensation.
Jeffrey Esser, CEO of the Government Finance Officers Association, received $318,372 in compensation for the fiscal year ending March 31, 2009, plus $18,604 in benefits and deferred compensation.
Larry E. Naake, executive director of the National Association of Counties, made $317,446 in compensation plus $44,428 in benefits and deferred compensation during the 2008 calendar year.
Raymond Scheppach, executive director and CEO of the National Governors Association, received a total of $273,037 in compensation as well as $37,306 in benefits and deferred compensation from his group and its Center for Best Practices.
Among other muni groups, Barbara J. Thompson, executive director of the National Council of State Housing Agencies, had the highest salary. She made $500,750 and $46,000 in benefits and deferred compensation for the fiscal year ending June 30, 2007.
At least three groups have contracts with management companies. The Council of Infrastructure Financing Authorities paid Navigant Consulting $319,700 during the 2007 calendar year. The firm's Rick Farrell is executive director of CIFA.
During the same period, the National Association of Local Housing Finance Agencies, where John Murphy is executive director, paid Smith Bucklin Corp. $199,023. The payment covers a portion of Murphy's compensation, benefits, office space, and furnishing attributable to NALHFA.
And during the 2008 calendar year, the Association of Financial Guaranty Insurers Inc. paid Mackin & Co. $241,135, of which 90% went to management and 10% went to lobbying, including $47,260 for administrative expenses. Bob Mackin is executive director of AFGI.
Perhaps it comes as no surprise, given the tumult among bond insurers during the past 18 months, that AFGI reported its membership fee revenue dropped sharply during the 2008 calendar year to $491,268 from almost $2.3 million the previous year. That period coincided with most top insurers losing their triple-A ratings.
But Mackin said the revenue drop reflects reduced dues rates and stressed that AFGI had 12 paid members during both 2007 and 2008.
Meanwhile, Thomas Kuhn, president of the Edison Electric Institute, which represents investor-owned utilities, received almost $2.6 million in addition to $1.4 million in benefits and deferred compensation for the 2007 calendar year, much more than the $858,241 and $1.41 million in benefits and deferred compensation he earned in 2006.
Though EEI is not a muni group, it is included in the survey as a contrast to the American Public Power Association. Alan H. Richardson, the former president and CEO of APPA, made $635,801 in addition to $17,350 in benefits and deferred compensation during the 2007 calendar year. He retired in December 2007, after 30 years with the group, and was succeeded by Mark Crisson. Crisson, who officially started Dec. 1, 2007, made $62,983 in his first month in the job, according to the group's most recent Form 990.
When comparing the salary levels of individuals among the 21 groups, it should be noted that many of the groups have different fiscal year end-dates and some have not yet had to file for the most recent fiscal year. Eight of the groups' most recent filings were for the 2007 fiscal year, while three of the groups' filings were for the 2008 calendar year. Ten of the groups had fiscal years that ended between March and November 2008.
Timely Form 990s were not available from at least three groups that applied for filing extensions: the National Association of Bond Lawyers, the relatively new Regional Bond Dealers Association, and the Financial Accounting Foundation, which oversees the Governmental Accounting Standards Board.
A spokeswoman for another group, the United States Conference of Mayors, referred The Bond Buyer to copies of the group's 990s that are available online. However, none were more current than one from 1998.