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August 20, 2020

Executive Compensation at the National Cattlemen’s Beef Association (2017)

by Anne Paddock

The National Cattlemen’s Beef Association (NCBA) is a tax-exempt 501 (c) (6) – a “business organization” – whose purpose is to increase demand and profits for cattle and beef producers. To do this, members (many of whom are cattle owners) pay dues (based on the number of heads of cattle) starting at $150 to over $2,000 annually (although each cattle owning member has only 1 vote no matter how many head of cattle he/she owns).  In addition, the NCBA also has non-voting members who pay $50-$200 annually to belong to the association.

In 2016 (the most recent IRS Form 990 is 2016 for the year ending September 30, 2017), the NCBA reported $65 million in revenue of which just under $6 million came from membership dues. Nearly $36 million came from the Beef Promotion Operating Committee – BPOC – (made up of 10 producers of the NCBA and 10 producers elected by the Federation of State Beef Councils – a group made up of 44 Qualified State Beef Councils  (QSBC) that collect $1 a head for “beef check off”).  According to the Beef Act, the BPOC has to contract with national, non-profit, industry-governed organizations to enhance beef demand nationwide. Confused?  Most people would be. It appears that cattle owners belonging to a QSBC pay $1 per head to belong to their QSBC with the 44 QSBC’s comprising the Federation of State Beef Councils which is a division of the NCBA. Could they make their organizational structure any more confusing?

To restate, nearly $6 million of revenue came from membership dues. Nearly $36 million came from the BPOC. The remaining revenue came from three sources:  $10 million came from the “State Beef Council,” nearly $9 million from meetings and sponsorships, and $4 million from advertising, investments, and other sources.

Expenses in 2017 totaled $65 million, classified as follows:

  • $28 million (43% of revenue):  Advertising and Promotion
  • $17 million (26% of revenue):  Compensation
  • $ 9 million (14% of revenue):  Primarily “Program Execution Professional Fees” (no other detail provided)
  • $ 7 million (11% of revenue):  Travel and Conferences
  • $ 4 million (6% of revenue):  Office-Related and Miscellaneous Expenses

In essence, $43 out of every $100 in revenue collected was spent on advertising and promotion, which appears to be low given that the purpose of the NCBA is to promote beef.  The second largest expenditure was on staff – $17 million was spent on compensation for 164 staff, which equates to an average compensation of about $104,000.  36 employees received more than $100,000 in compensation with the 9 most highly compensated individuals listed below:

  • $507,619:  Kendal S Frazier, CEO
  • $373,554:  Doug Evans, CFO
  • $267,098:  Colin Woodall, SVP, Gov’t Affairs
  • $258,677:  Marvin L Kokes, SVP, Association Marketing
  • $253,495:  Michael Miller, SVP, Global Marketing (former)
  • $248,435:  Todd Johnson, SVP, Federation Services
  • $220,660:  Richard Husted, VP, Strategic Planning
  • $211,976:  Michael Petersen, Controller
  • $192,708:  Mandy Carr, Sr Ed, Sciences and Products Solution

The 9 most highly compensated employees received more than $2.5 million, which equates to an average compensation of about $280,000.  If the above were deducted from total compensation, then the remaining 155 staff were compensated $14.5 million, which equates to an average compensation of $94,000.

8 of the 9 most highly compensated employees are male while 1, the lowest on the list, is female.

55 independent contractors received more than $100,000 in compensation with the five most highly compensated listed below:

  • $10,552,709:  US Meat Export Federation of Denver, CO for export services
  • $ 8,124,385:  RGA Media Group, Inc. of Chicago, IL for advertising
  • $ 3,267,158:  Ketchum, Inc. of New York, NY for public relations
  • $ 1,582,896:  VML, Inc. of Chicago, IL for advertising
  • $   977,435:  Foodminds, LLC of Chicago, IL for public relations

To read the IRS Form 990 (2017 for the year ending September 30, 2017), click here.

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