Executive Compensation at the National Automobile Dealers Association (NADA)

The National Automobile Dealers Association (NADA) is a non-profit tax-exempt 501 (c) (6) – a professional trade association – representing automobile dealers (members) on legislative and regulatory matters in Congress and other government entities and as an intermediary with car manufacturers. In addition, NADA provides educational information to its members on legal, legislative, and regulatory issues.

Key financial information to know about NADA include:

NADA reported total revenue of $90 million in 2017.  Membership dues ($5.9 million) accounted only for a small portion of total revenue.

NADA derives most of its revenue ($70 million) from convention and exposition fees, management fees, gains on the sale of assets, and investment income.

Expenses were $75 million (so they spent significantly less than they brought in) with the largest expense compensation totaled $22 million for 165 employees for an average compensation of $133,000. However, only 76 employees received more than $100,000 in compensation with the 12 most highly compensated employees listed below:

• $1,696,597:  Peter K Welch, President and CEO ($169,660 is from a related org)
• $  752,123:  Andrew D Koblenz, EVP and General Counsel ($75,212 is from a related org)
• $  682,099:  Joseph L Cowden, EVP and CFO ($68,210is from a related org)
• $  670,005:  David W Regan, EVP Legislative Affairs
• $  445,293:  Jonathan Collegio, SVP Public Affairs
• $  415,594:  Ivette Rivera Hayes, SVP Legislative Affairs
• $  405,978:  Paul D Metrey, VP Regulatory Affairs
• $  401,780:  Michael Harrington, VP Legislative Affairs
• $  389,902:  James C Minnis, VP and Associate General Counsel ($38,990 was from a related org)
• $  386,964:  Michael T Regan, SVP Industry Affairs
• $  360,649:  Peter Fong, SVP Dealership Operations
• $  335,736:  Stephen R Pitt, SVP Conventions Services

The above 12 most highly compensated employees received $7 million, which equates to an average compensation of $583,000.  If the $7 million is deducted from total compensation ($22 million) and the total number of employees (165) was adjusted downward by 12 to amount for the above employees, then $15 million in compensation was paid to 153 employees which equates to an average compensation of $98,000.

11 of the 12 (92%) of the most highly compensated employees are male while 1 of the 12 (8%) is a female.

The Form 990 also reports NADA pays for first class travel.  Specifically, “certain directors are reimbursed for first class airfare to attend board or committee meetings.”  In addition, NADA provides tax indemnification and gross up payments and pays for health or social club dues or initiation fees.

5 independent contractors were compensated more than $100,000:

• $2.8 million:  CDK Global of Cincinnati, OH for info tech services
• $1.8 million:  Freeman of Dallas, TXfor convention services
• $ .7 million:  Directions of Schaumberg, Ill for convention services
• $ .4 million:  Impexium of Mclean, VA for info tech services
• $ .3 million:  Shuttle Services, Inc of Sidell, LA for convention services

In summary, NADA is a trade association that does not rely on membership fees as its primary, secondary, or even tertiary source of revenue.  Instead, NADA relied on convention and exposition fees, management fees, gains on the sale of assets, and investment income.  The organization raised $90 million in 2017 and spent $75 million (the remaining $15 million went to the general fund which had $253 million had year-end). The largest expenses for NADA was compensation which totaled $22 million, $7 million of which went to 12 employees (11 males and 1 female). The remaining 153 employees were compensated $15 million which equates to an average compensation of $98,000.

NADA paid for first class travel (really) along with health or social club dues or initiation fees and provided tax indemnification and gross up payments.

To read the IRS Form 990 (2017), click here.