Executive Compensation at the National Restaurant Association (2018)
The National Restaurant Association (NRA) had a windfall of about $170 million in 2018 when they sold the “National Restaurant Association Show” to a unrelated private company Winsight, LLC – an information services company focused on the food and beverage industry. Consideration received included a promissory note (about $150 million) and an equity investment in Winsight, LLC. A sponsorship agreement provides annual royalty payments equal to 2% of the gross revenues of the show for 45 years, beginning in 2019.
The NRA is the largest food trade organization in the world. Governed by a Board of Directors comprised of 90 leaders (although the Form 990 indicates there are 71 independent board members with 74 listed (60 males and 14 females) because of timing differences) in the industry, the National Restaurant Association is a professional trade association, a tax-exempt non-profit organization based in Washington, DC.
In 2018, the NRA reported total revenue of $289 million (compared to $110 million in 2017), most of which came from five (5) sources: the sale of assets ($172 million) which was the sale of the annual trade show, the sale of inventory, which appear to be trade data ($65 million), trade shows, conferences, and seminars ($35 million), and royalties ($6 million). Membership dues – often the biggest source of revenue for trade associations – provided only $4 million to the organization in 2018.
Expenses totaled $118 million in 2018 with the five (5) highest expenses being:
- Compensation ($51 million)
- Travel/Conferences/Trade Shows ($15 million)
- SCA (maker of hygiene products) payments ($14 million)
- Office-Related Expenses ($12 million)
- Fees for Services ($11 million)
326 employees were compensated $51 million, which equates to an average compensation of $156,000. However, only 130 employees received more than $100,000 in compensation. The 14 most highly compensated employees were reported to be:
- $5,731,399: Dawn M Sweeney, President and CEO
- $1,226,912: Marvin F Irby, CFO
- $1,271,090: Terry J Erdle, Chief Revenue Officer
- $1,074,198: Mary Pat Heftman, EVP, Convention and Strategic Alliances
- $ 914,998: Sherman L Brown, EVP, Products & Services
- $ 739,703: Cicely Simpson, EVP, Policy and Government Affairs
- $ 696,565: Christopher Rodgers, SVP, General Counsel
- $ 545,006: Kevin A Steele, Chief Information Officer
- $ 512,940: Barbara A Polk, Chief Administrative Officer
- $ 432,036: Clinton Wolf, SVP, Health and Insurance Services
- $ 431,433: Hudson Riehle, SVP, Research and Knowledge
- $ 428,037: Perry Quinn, SVP, Business Innovation Development
- $ 421,837: Jeffrey G Calore, SVP, Strategic Alliances
- $ 384,161: Steven S Danon, SVP, Public Affairs
10 of the 14 (71%) most highly compensated employees are male while 4 (29%) are female. The most highly compensated employee is Dawn M Sweeney, who was compensated more than $5.7 million in 2018.
The 14 most highly compensated employees received more than $14 million in compensation.
The NRA paid for first class or charter travel, companion travel, health or social club dues or initiation fees, and provided tax indemnification and gross up payments. For more detail, see Schedule J of the Form 990 (link below).
121 independent contractors received more than $100,000 with the five largest reported to be:
- $3,047,318: GES – Chicago of Chicago, IL for exposition services
- $1,661,317: McCormick Place of Chicago, IL for exposition services
- $1,652,543: RR Donnelley – Chicago of Chicago, IL for warehouse services
- $1,571,367: Trianz Consulting, of Rosemont, IL for data technology consulting
- $1,423,068: Interior Investments, of Chicago, IL for interior design
In summary, the NRA is a trade organization that paid more than $14 million to its top 14 executives (including nearly $6 million to the President), paid for first class travel, companion travel, health or social club dues or initiation fees, and provided tax indemnification and gross up payments. In addition, the organization spent more than $1.4 million in interior design services in 2018. And, finally, the NRA sold its trade show for about $170 million, and yet this organization does not have to pay taxes. How is that?
To read the IRS Form 990 (2018), click here.