Latest Tax Return Gives Insight Into SHRM’s Executive Pay Practices

Like businesses all across the globe, SHRM had to dip into its reserves to cover expenses in 2009 when it came up $8.7 million short.

The organization’s recently posted 2009 tax return shows the Society for Human Resource Management spent $89.9 million in 2009, while taking in $81.2 million from dues, conferences, and advertising.

That compares to the $17.1 million deficit the organization ran up in 2008 when it spent $104.8 million, but took in only $87.7 million. In 2007, SHRM found itself with a $23.4 million surplus.

Because the data comes from tax returns (??non-profit returns are public), some of the expenses allowed by the IRS such as depreciation aren’t out of pocket. So the actual losses on operations are less. In 2009, depreciation, depletion and amortization came to $3.6 million. However, that still meant a year end cash deficit of $5.1 million.

Generous pay structure by non-profit standards

As is typical of a not-for-profit professional association, SHRM’s largest expense is salaries. In 2009, it spent $37.1 million on compensation and benefits. In 2008, that amount was $36.3 million. In 2007, it was $32 million.

Of the total in 2009, 25 percent of the total comp and benefits went to just 30 employees, who earned a combined $7.1 million. SHRM’s highest paid employee in 2009 was China Gorman, then SHRM’s Chief Global Member Engagement Officer (and before that and for most of her tenure with the organization, was SHRM’s COO). She was paid $635,701 that year, which was about $63,000 more than (now former) CEO Laurence O’Neil was paid.

By non-profit standards, SHRM’s pay structure is generous. Among organizations with incomes similar to SHRM’s, executives earn in a range from about $250,000 to $400,000 annually. That’s according to a database made available by The Chronicle of Philanthropy.

Charity Navigator, a non-profit, which maintains records on more than 5,500 publicly supported charities, puts the median CEO salary at $336,104 for organizations with incomes of $50 million to $100 million. Only at charities with budgets between $200 and $500 million is the median salary close to SHRMs. Charities that size pay their CEO $429,754 on average.

A third source, Economic Research Institute, says half the non-profits in employment related sectors with revenue comparable to SHRM’s  pay less than $284,259. At the top end, organizations with revenues like SHRM’s pay around $401,000.

Brisk growth in top salaries since 2007

The growth in top salaries at SHRM has been brisk since 2007, when the return listed 11 employees earning $150,000 or more. In 2008, 26 employees earned at least that. And in 2009, that number was 30. Most of the individuals listed in the report earn considerably more than $150,000.

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SHRM was emailed asking for comment. The post will be updated when the response comes in.

Last week, the SHRM Members for Transparency group circulated to its members and others a summary of the 2009 tax return (see document below). The SMFT is made up of a large number of well known and respected former SHRM board members, executives, and current SHRM members who have voiced public concerns with recent actions by SHRM’s Board of Directors and the organization’s leadership.

Although the SMFT group would not comment on the information in the tax return, the group’s e-mailed summary specifically points out the salaries of key members of the SHRM staff, the compensation paid to board members (which totaled $220,563), and detailed the amounts the organization is spending to support offices and staff around the world.

The group included membership numbers for the regions and a per member spending breakdown. The report said more money was spent supporting some 3,500 members in Asia, India, Canada, and Mexico than in support of the 70,350 chapter affiliated members in the U.S.

John Hollon, Vice President for Editorial of TLNT.com, contributed to this story. Contact him at john@tlnt.com, and follow him on Twitter at http://twitter.com/johnhollon

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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