Executive Compensation at Rotary International (2022)

Rotary International (RI) is a 501 (c) (4) – a social welfare organization that oversees 32,000 Rotary International Club organizations – based in Evanston, Illinois. Governed by a 19-member board (the president, president-elect, general secretary who is also the CEO, and Rotary Zone Directors), RI reported total revenue of $104 million most of which came from membership dues. Expenses totaled $102 million with the largest expense reported to be compensation.

RI reported having 350 employees who were compensated $42 million which equates to an average compensation of $120,000. However, only 90 individuals received more than $100,000 in compensation with the 14 most highly compensated individuals listed below:

• $627,944:  John Hewko, General Secretary
• $389,530:  Eric Jones, Chief Investment Officer
• $388,398:  Michelle Berg, Deputy General Secretary
• $355,604:  Julie Burke, CFO
• $335,904:  James Barnes, Chief Program/Member Services Officer
• $317,022:  David Alexander, CCO
• $303,234:  Steven Routberg, Gen Counsel
• $290,603:  Thomas Thorfinnson, Chief Strategy Officer
• $269,233:  Kristopher Newbauer, Chief HR Officer
• $246,046:  Jonathan South, Investment Officer
• $234,349:  Andrew McDonald, Deputy Gen Counsel
• $231,851:  Michael Patock, Investment Officer
• $221,441:  Nora Zei, Chief Participant Experience Officer
• $217,137:  Richard Plocinik, Director of Enterprise Projects

It is important to point out that all of the highly compensated individuals listed above receive compensation from more than one Rotary organization. Although the IRS Form 990 does not specify which other Rotary organization, it appears to be the Rotary Foundation because the same executives are listed on RF’s most highly compensated individuals and the numbers match.  To look at just the compensation from RI would be missing the big picture because the total compensation each individual received from both RI and RF (since they operate out of the same address) presents a more accurate reporting of compensation.

Also, of the 14 individuals listed above, 11 were male (79%) while 3 were female (21%).

The most highly compensated employee was John Hewko who received $627,944 in 2022, and $3.5 million in compensation from 2017-2022:

• 2022:  $627,944
• 2021:  $630,024
• 2020:  $588,436
• 2019:  $570,099
• 2018:  $545,733
• 2017:  $525,638

The IRS Form 990 also reports RI paid for:

• First Class or Charter Travel
• Travel for Companions
• Tax Indemnification and Gross-up Payments
• Housing Allowance or the use of a Private Residence
• Health or Social Club Dues or Initiation Fees
• Personal Services (such as maid, chauffeur, chef)

See the Form 990, Schedule J, Part III, Supplemental Information for details on these expenses.

The IRS Form 990 also reports the 5 highest paid independent contractors were:

• $3.4 million to Huron Consulting Services, of Chicago, IL for consulting services
• $2.5 million to Softserve, of Ft Myers, FL for staffing and consulting
• $1.7 million to Microsoft Corp, of Dallas, TX for software licensing
• $1.5. million to Oracle, of Dallas, TX for software licensing
• $1.1 million to TEK Systems, of Hanover, MD for staffing

RI also paid $9 million to District Governors (this info was reported as a non-compensation expense on the income statement). There are 529 District Governors which if equally distributed means each District Governor received $17,000.

Summary

In summary, Rotary International – the oversight organization – received more than $100 million in funding primarily from members through the Rotary clubs and member donations. The executives receive generous compensation packages from RI (and a related Rotary organization) and generous perks. In addition, $9 million was paid to the 529 District Governors which is not classified as compensation for employees on RI’s IRS 990.

In general, it seems the hierarchy of Rotary is generously taken care of primarily through the membership fees and donations of Rotary members.  In addition, it is important to note Rotary International and Rotary Foundation operate out of the same address, with each organization paying a portion of the most highly compensated individuals compensation.  In addition, RI paid for first class or charter travel, travel for companions, health or social club dues or initiation fees, use of private residences or a housing allowance, personal services, and gross up payments or tax indemnifications.

To read and review the IRS Form 990 (2021 for the year ending June 30, 2022), click here.