Executive Compensation at the American Red Cross

The American Red Cross (ARC) provides a link on their website to the 2016 American Red Cross Tax Form 990 but the link is actually to the 2015 IRS Form 990 that covers the year beginning July 1, 2015 and ending June 30, 2016 – a year that was not one of ARC’s better years financially.

First, revenue was down by $100 million from $2.7 billion the year before to $2.6 billion in the most recent year.  Second, overall net assets decreased by $600 million from $1.6 billion at the beginning of the year to $1 billion because the organization spent more ($61 million) than they raised, there was an unrealized loss ($146 million) on investments, and because there was a loss ($400 million) in the employee retirement pension and post retirement benefits fund (note: the organization’s largest liability – $1.1 billion – is to pension and post retirement benefits for its employees).

ARC is a labor intensive organization with $1.414 billion (or 54% of revenue) spent on salaries, pensions, benefits, and payroll taxes for the 21,435 employees (which equates to about $70,000 per employee). Most revenue is going to support the staff and office costs associated with collecting, testing, and distributing biomedical supplies so high staff expenses are to be expected.

1,248 employees received more than $100,000 in total compensation.

The IRS Form 990 also reports the 17 most highly compensated employees were paid $7.4 million (an average of $435,000) :

• $631,537:  Benjamin Spindler, CEO Delta Blood Bank
• $597,704:  Greg Williamson, Chief Investment Officer
• $553,086:  Shaun Gilmore, President of Biomedical Services
• $533,994:  Gail McGovern, President
• $532,152:  James C Hrouda, EVP of Biomedical Services
• $503,724:  Anne Shelton, Deputy Chief Investment Office
• $489,078:  Christina Samson, Chief Investment Officer
• $472,707:   Brian Rhoa, Chief Financial Officer
• $420,009:  Clifford Holtz, President of Humanitarian Services
• $408,970:  John McMaster, President, PHSS
• $408,252:  Kathryn Waldman, SVP Quality and Reg Affairs
• $404,202:  Margaret Dyer, Chief Marketing Officer
• $367,983:  Melissa Hurst, Chief Human Resources Officer
• $367,672:  David Meltzer, General Counsel
• $355,273:  Neal Litvack, Chief Marketing Officer
• $216,471:  Jennifer Hawkins, Corporate Secretary
• $146,295:  Dale Bateman, SVP Chief Audit Executive

Four staff received approximately $600,000 in severance packages:

• Chief Investment Officer, Christina Samson was paid a severance of $140,538
• CEO of Delta Blood Bank (ARC operates 36 blood banks) wa given a severance of $306,281
• Highly Compensated Employee, Margaret Dyer was given a severance of $124,789
• Deputy Chief Investment Officer received a severance of $11,769

The IRS Form 990 also reports:

The President of Humanitarian Services received a stipend of $5,500 to defray the costs of traveling to and from the headquarters in Washington, DC

Of the 17 executives listed above,  10 (or 59%) are men while 7 (or 41%) are women. Of the ten highest compensated employees, 7 (or 70% are men) and 3 (or 30%) are women.  Of the five most highly compensated employees, 4 (or 80%) are men while 1 is a woman.  Of the ten lowest compensated employees, 6 (or 60%) are men while 4 (or 40%) are women.