WASHINGTON — Timothy Ryan, president and chief executive officer of the Securities Industry and Financial Markets Association, had the highest compensation level among the leaders of 22 self-regulatory, dealer, governmental and other groups in the muni market, according to the latest forms the groups filed with the Internal Revenue Service.

Where the Money Goes

Ryan received $3.0 million in total compensation and benefits, or $2.95 million excluding benefits, for the year ending Oct. 31, 2011, according to SIFMA’s latest 990 form. All nonprofit groups must file 990 forms annually with the IRS.

Richard Ketchum, chairman and CEO of the Financial Industry Regulatory Authority, the self-regulator that enforces the Municipal Securities Rulemaking Board’s rules, had the next highest level of total compensation and benefits, at $2.61 million, or $2.26 million excluding benefits, for 2010.

Lynnette Kelly, executive director of the MSRB, the one other self-regulatory organization in the group, made a total of $655,239 in compensation and benefits, or $602,720 without benefits, for the year ending Sept. 30, 2011.

In contrast to SIFMA’s Ryan, Michael Nicholas, chief executive of Bond Dealers of America, the other dealer group in the muni market, made $422,256 in compensation and benefits, or $323,222 without benefits, for the year ending Feb. 29.

With the possible exception of BDA, the salary levels of the groups’ top earners are even higher now because while these forms are the latest available, most are out of date. Further, comparisons are not “apples to apples” because they do not represent the same fiscal years.

BDA was the only group that filed a 990 in 2012. Six groups were for the 2011 calendar year, while four were for years ending June 30, 2011, and three were for years ending Sept. 30, 2011.

The Government Finance Officers Association’s 990 was for the year ending March 31, 2011, the 990s for the American Bankers Association and the ABA Securities Association were for the year ending Aug. 31, 2011, and SIFMA’s 990 was for the year ending Oct. 31, 2011. Four of the groups’ 990s were for 2010.

The other top earners among industry groups were Paul Schott Stevens, president and CEO of the Investment Company Institute, and Edward Yingling, who retired as ABA president and CEO at the end of 2010, but still received compensation in 2011. He was replaced by Frank A. Keating 2d.

Stevens followed Ketchum with $2.05 million in compensation and benefits, $1.80 million of which was base compensation and bonuses or other incentives, for the year ending Sept. 30, 2011. Yingling received $1.87 million of compensation and benefits, or $1.3 million without benefits, for the year ending Aug. 31, 2011.

Leslie F. Seidman, chairman of the Financial Accounting Standards Board, received the next highest level of pay. In 2011, Seidman made $1.03 million in compensation and benefits, or $953,403 without benefits. That compares to $513,989 in total compensation and benefits, or $440,773 minus benefits, for Robert Attmore, chairman of the Governmental Accounting Standards Board who recently announced plans to retire from GASB next June.


Besides substantial pay and benefits, FINRA’s highest paid executives got some major perks, which were described in run-on, microscopic print in a supplemental section of the authority’s 990 form. High-level executives were permitted to travel first class or charter to and from Canada, Mexico and other international spots, as well as within Europe, if flight times were more than four hours. FINRA paid for companions to join employees on extended stays in far-away work locations.

Ketchum received up to $20,000 each calendar year for admission fees, dues and house charges at one club in each of New York City and Washington, D.C. He also got cars and drivers for business purposes in both of those locations, which certain other FINRA employees could use if available.

In addition, Ketchum got up to $20,000 per year for personal financial and tax counseling and was permitted spousal travel for certain business-related events.

The MSRB reimbursed Kelly and its board members for business class on trains or first class on airlines for travel of more three hours total one way.

Unlike dealer, state and local and most other muni market groups, the two self-regulatory organizations — FINRA and the MSRB — pay their board members. FINRA paid members of its board of governors a base of $50,000 and more if they are in leadership positions such as committee chairs, said spokeswoman Nancy Condon. She pointed out that corporations also typically pay board members.

For its 2010 calendar year, FINRA paid 25 members, excluding Ketchum, a total of $1.3 million. That included seven members that served for only part of the year. Apart from Ketchum, the board’s chair, the highest paid board member at that time was John Schmidlin, who was retired and represented the public. He made $82,253.

The MSRB paid members of its board a base of $45,000, with committee chairs receiving $50,000. The board’s vice chair got an additional $15,000 and the chair an additional $30,000 to the base of $45,000, according to MSRB communications director Jennifer Galloway. The board paid 15 members a total of $780,000.  That included $75,000 for Peter Clarke, a managing director at JPMorgan Securities Inc., who was MSRB chair in fiscal 2010, and $60,000 for Alan Murphy, a senior vice president at Stifel Nicolaus & Co. who served as board vice chair that year.

Galloway said board members earn their fees by mastering stacks of documents related to rulemaking and by participating in at least four two- to three-day board meetings each year, as well as some conference calls.

The Financial Accounting Foundation, which oversees FASB and GASB, also pays members of its board of trustees. Seventeen trustees received a total of $914,375 in 2011. The chairman of the board received $240,000. A trustee got a base amount of $45,000 and another $10,000 more if he or she is a committee chair, said Robert Stewart, FAF’s vice president of communications. Two trustees declined compensation last year. The base amount of pay for trustees rose to $55,000 this year, Stewart said.


The compensation of the executive directors of state and local groups was much lower than for the heads of industry groups.The highest paid staff official of a state and local government group was Jeffrey L. Esser, executive director and CEO of the Government Finance Officers Association.

Esser’s total compensation was $426,924, or $369,491 without benefits, for the year ending March 31, 2001.

Next highest paid was Donald J. Borut, who is slated to retire as executive director of the National League of Cities later this year. The NLC reported $391,061 of total compensation, or $348,712 without benefits, for Borut for the fiscal year ending Sept. 30, 2011.

Raymond C. Scheppach, who left the National Governors Association as executive director in January 2011, made $329,462, or $284,618 without benefits, according to the group’s 990 for the fiscal year ending June 30, 2011. Replaced by Dan Crippen, Scheppach is now professor of public policy at the University of Virginia’s Frank Batten School of Leadership and Public Policy.

Several other officials of the 22 groups have changed since their latest 990 forms were filed or are about to change.

Stephen Luparello, who was senior executive vice president of FINRA, left that group on Oct. 7 to join the WilmerHale law firm.

Harold Johnson, the MSRB’s former deputy executive director, left the board in 2011.

William Daly left BDA earlier this year to become director of governmental affairs for the National Association of Bond Lawyers. He replaced Victoria P. Rostow. Sarah Miller retired as executive director of the ABA Securities Association at the end of October 2010 and was replaced by Cecelia A. Calaby.

John Horsley, executive director of the American Association of State Highway and Transportation Officials and Jack Basso, director of program finance and development, plan to retire from AASHTO in February.

Three groups have management contracts with firms. The National Association of Local Housing Finance Agencies paid SmithBucklin Corp. $396,277 in 2011. The Council of Infrastructure Financing Agencies paid Madison Associates LLC a total of $336,000 in 2010. The Association of Financial Guaranty Insurers Inc. paid Macklin and Casey $158,080 last year.


FINRA had the greatest amount of net assets or fund balances, at $1.78 billion, followed by the FAF at $67.99 million, SIFMA at $35.80 million, and the MSRB at $33.34 million.

NACo had the highest net assets and fund balances of the state and local groups, at $28.56 million. NAST had the lowest at $1.29 million.

Three groups showed negative balances on their 990 forms. Net assets and fund balances were  negative $648,080 for the ABA, negative $3.36 million for the ABA Securities Association and negative $7.16 million for the American Public Power Association.

The MSRB’s latest 990 shows it received $1.98 million in revenue collected from firms and individuals by FINRA for muni rule violations. The MSRB was given the authority to take some of those revenues from FINRA under the Dodd-Frank law.

The board also received $30.28 million in initial, annual, underwriting, transaction and technology fees from firms, as well as $1.02 million from subscriptions, according to the document.


Several groups paid legal, consulting and other fees to firms. The 990 forms require nonprofit organizations to report the five highest-paid independent contractors that received more than $100,000 from them.

FINRA paid $71.2 million in fees for tech consulting and testing services.

The MSRB also paid almost $2.59 million in fees for software development and recruitment, call center support, and human resources and organizational consulting.

SIFMA paid $4.7 million in legal or consulting fees, including legal fees of $2.55 million to Davis Polk & Wardwell and $502,773 to Cleary Gottlieb Steen & Hamilton. The group paid consulting fees of $708,492 to the Brunswick Group, $622,500 to Intermedia Events and $407,929 to Threespot Media.

BDA paid $356,744 in legal fees to Nixon Peabody and $100,369 to RR&G for lobbying. The dealer group listed the lobbying payments in the independent contractor section of the 990, rather on the line designated for lobbying.

ABA paid $2.75 million of consulting fees, including $1.05 million to the Glover Park Group, $697,885 to Cathy Berch & Asssociates in Boulder Junction, Wis., $589,250 to Korn Ferry International, $209,686 to Barnett Sivon & Natter PC and $200,937 to Keybridge Research in Potomac, Md. John Hall, an ABA spokesman said the payments to Glover Park were not for lobbying and that the ABA hires Glover Park for polling, public relations and related.

ICI listed $3.12 million in payments, including $1.61 million to Bain & Co. for consulting, $561,760 to PricewaterhouseCoopers for audit and consulting services, $345,344 to Fox Architects, $328,115 to Covington & Burling LLP for legal services, and $268,974 to Sard Verbinnen & Co. for consulting.

The NLC’s contractor payments included $139,433 in legal fees to DLA Piper and $141.14 million to the Washington Speakers Bureau, among others.

The NGA’s Center for Best Practices’ payments included $150,988 to Glover Park, $134,212 to Ross & Associates for consulting, as well as $133,615 to the National Conference of State Legislatures. NAST paid the Council of State Governments $633,102 for support services.

AFGI paid $194,021 to Dewey & LeBoeuf LLP for legal services.

The FAF paid $453,468 to K&L Gates for “consultant external relations.”

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