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January 16, 2018

Executive Compensation at United Way

by Anne Paddock

United Way may refer to a number of charitable organizations throughout the world but in the United States, United Way generally refers to United Way Worldwide (formerly United Way of America) and/or one of the 1,400 offices in 40 countries and territories.

United Way Worldwide is the leadership and support organization for the whole network which includes approximately 1,200 local offices (approximately 85% of the total number of offices) in the United States (including DC, Puerto Rico, and the Virgin Islands). A non-profit 501 (c) (3), United Way Worldwide is required to submit an IRS Form 990 (a tax return that provides details on revenue, expenses, assets, liabilities, and more) annually, as does each of the local offices. 

245 people were employed and compensated $27.6 million by United Way Worldwide in 2015, which equates to an average compensation of $113,000, although only 80 staff received a compensation package greater than $100,000.

The IRS Form 990 (2015) reports $5.6 million in compensation to 15 executives – an average of $335,000 each – at the national level which is summarized as follows:

  • $1,236,611:  Brian Gallagher, President and CEO
  • $  441,470:  Stacey Stewart, President United Way USA
  • $  404,128:  Joseph V Haggerty, EVP Chief Operating Officer
  • $  391,064:  Robert Berdelle, EVP and CFO
  • $  351,933:  Victoria Lins, Former EVP Brand Marketing (terminated 9/30/2015)*
  • $  348,572:  Evan Hochberg, EVP Impact Strategy Innovation
  • $  324,850:  Brian Lachance, SVP Chief of Staff
  • $  315,572:   Jose Ferrao, EVP International Network
  • $  270,198:  Paul DeBassio, EVP Investor Relations
  • $  266,966:  Patricia Turner, SVP and General Counsel
  • $  261,848:  John Taylor, VP and Chief Technology Officer
  • $  254,464:  Steve Taylor, VP Counsel Public Policy
  • $  232,092:  Marci Young, VP EIH Strategic Partnerships
  • $  227,931:  Tracy Nilles, VP Development
  • $  168,052:  Sherry Brach, Former EVP Investor Relations (terminated 6/30/2015)

* The severance terms included the equivalent of 4 months of salary plus $23,625 in incentive compensation for work performed in 2015.

As illustrated above, 9 of the 15 executives (or 60%) were men and 6 were women (or 40%). In the top half, there were 6 men and 2 women while in the bottom half, there were 3 men and 4 women.  If the two employees who were terminated were not considered, then 9 of the 13 executives or 69% are men and 4  (or 31%) were women.  In the top half, there were 6 men and 1 woman while in the bottom half, there were 3 men and 3 women.

The 990 also reports the following information:

The President and CEO has four components to his/her compensation package:  base salary and annual performance incentive, health and welfare benefits, retirement benefits, and other benefits.

The 2015 base salary was $540,000 and the annual performance incentive for the President and CEO was $175,000.

The CEO is provided both qualified and non-qualified retirement benefits. The CEO  receives 10% of his/her salary annually on a deferred basis with an initial vesting of 3 years and annually thereafter. In addition, the CEO is provided with a deferred compensation plan of $180,000 annually vesting after 3 years and 2 years thereafter.

Other benefits to the CEO and executives “would include such items as:  automobile allowances and temporary housing where applicable, for executives that relocate to join United Way Worldwide.

In 2015, United Way Worldwide advanced taxes in the amount of $19,396.19 for CEO Brian Gallagher’s SERP accrual. This amount was rerouted on his W-2 as deferred compensation.

It is important to note the 1,200 local United Way offices pay 1% of revenue to United Way Worldwide according to the United Way Worldwide website.

There are those who will wonder why United Way Worldwide needs to spend $27.6 million on 245 employees and specifically why the organization pays more than $1 million to its President and CEO  when the primary mission of United Way is to distribute funds to local organizations.  Given that most of the grants awarded by United Way Worldwide are to local United Way offices, a donor may wonder how these high salaries are justified.

To read a copy of the IRS Form 990 (2015) click here.

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