Executive Compensation at the National Retail Federation (2020)
The National Retail Federation (NRF) is a non-profit, tax-exempt 501 (c) (6) – a membership based trade association – whose mission is to “advance and protect the interests of the retail industry and to help retailers achieve excellence in all areas of their business.” That’s quite a mission, given the retail environment in this country. Retailers – both national chains and local – are closing daily with on-line presence a virtual requirement for survival.
Governed by 33 board members, 32 of whom are independent (40 are reported on the Form 990 due to timing differences; 28 are male while 12 are female), NRF is based in Washington, DC.
Often referred to as the “voice of retail,” the NRF raised about $60 million annually over the past few years with most revenue (about 80%) coming from events (an annual convention and about 20 conferences and workshops) and special projects. Membership dues only provide about $8 million (or about 12% of total revenue) annually to NRF. So, this organization is an event-centered trade association. Hence, the pandemic had a negative impact on the finances of NRF in 2020.
In 2020, the NRF reported total revenue of $20 million (compared to $57 million in 2019 and $60 million in 2018), with most revenue coming almost equally from events and special projects ($9 million or 45%) and membership dues ($8 million or 40%).
Expenses totaled $38 million, which means NRF spent $18 million more than the organization raised with the largest expenses reported to be:
- $19 million: Compensation
- $ 7 million: Fees for Services – primarily professional fees and a shopping campaign
- $ 5 million: Office-Related Expenses
- $ 3 million: Travel and Conferences
126 employees received $19 million in compensation (compared to 147 employees receiving $23 million in 2019) which equates to an average compensation of $151,000. However, only 55 employees received more than $100,000 in compensation (compared to 49 employees in 2019) with the 7 most highly compensated reported to be:
- $4,568,268: Matthew R Shay, President and CEO
- $ 866,962: David French, SVP, Gov’t Relations
- $ 663,196: William Thorne, SVP, Public Relations
- $ 649,904: Stephanie Martz, General Counsel
- $ 539,276: Lisa Marzetti, SVP, Member Development*
- $ 524,648: Susan Newman, SVP, Conferences
- $ 466,971: Artemis Sakell, Senior Director, Exhibits and Sponsors
The 7 most highly compensated employees received more than $8 million in compensation in 2020, which is nearly the same as in 2019 when revenue was $40 million higher. If total compensation were adjusted to exclude the 7 most highly compensated employees, then 119 employees were compensated $11 million, which equates to an average compensation of $92,000.
The President and CEO, Matthew R Shay received $4.6 million in compensation in a year where revenue dropped by $40 million fro $60 million to $20 million. Why his compensation and other highly compensated employees did not have compensation reductions is interesting to note. It is also interesting to note, Mr. Shaw has received $20 million in compensation over the past 5 years:
- $4,568,268: 2020
- $4,445,852: 2019
- $4,254,725: 2018
- $3,436,437: 2017
- $3,344,126: 2016
The NRF paid for first class or charter travel. Specifically, the NRF paid for first class travel for NRF employees for overseas travel.
The NRF paid for companion travel. Specifically, the NRF paid for companion travel for the CEO’s spouse.
The NRF paid for health or social club dues or initiation fees. Specifically, the NRF paid for monthly club dues for one employee (not stated who) for business purposes.
The CEO participates in a supplemental non-qualified retirement plan. Payments to the plan consist of NRF contributions – $600,000 in 2020.
Lisa Marzetti received a severance payment of $381,250 (“*”)
31 independent contractors received more than $100,000 in compensation. The five most highly compensated were reported to be:
- $2.0 million: Craft Media Digital, of Washington, DC for advertising
- $1.8 million: Freeman Audio Visual, of Dallas, TX for audio visual
- $1.7 million: The Freeman Companies, of Dallas, TX for show management
- $0.7 million: Bluetext LLC, of Washington, DC for marketing strategy
- $0.5 million: Seyfarth Shaw, of Chicago, IL for resource deployment and support
In closing, the NRF is a small trade association that historically (pre-pandemic) raised about $60 million annually – primarily through trade shows/conventions and spent half of revenue on compensation with the President and CEO receiving more than $4 million in 2019. With the 2020 pandemic, revenues declined to $20 million with expenses eating nearly all of revenue, including more than $8 million to the 7 most highly compensated employees including $4.6 million to Mr. Shaw. In fact, Mr. Shaw has received more than $20 million in compensation over the past 5 years.
First class travel, companion travel, and social club dues continued to be paid buy NRF despite the drastic decline in revenue in 2020.
In 2020, NRF spent $17 million more than the organization raised causing net assets to decline to $20 million at year-end.
To read the IRS Form 990 (2020 for the year ending Feb 28, 2021), click here.