Executive Compensation at the National Retail Federation (2021)

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 – view an on-line presence a virtual requirement for survival.

Governed by 30 board members, 29 of whom are independent (37 are reported on the Form 990 due to timing differences; 27 are male while 10 are female), NRF is based in Washington, DC.

Often referred to as the “voice of retail,” the NRF raised about $60 million annually in the years leading up to the pandemic with most revenue (about 80%) coming from events (an annual convention and about 20 conferences and workshops) and special projects. Membership dues only provided about $8 million (or about 15% of total revenue) annually to NRF.  When revenue declined to $20 million in 2020, membership dues became a more predominant source of revenue because NRF, as an event-centered trade association couldn’t rely on these events during the pandemic because most were cancelled.

In 2021, revenue rebounded to $49 million as events started to resume.  $35 million (71% of revenue) came from events while $8 million (16% of revenue) came from membership dues.

Expenses totaled $51 million, which means NRF spent $2 million more than the organization raised with the largest expenses reported to be:

• $22 million:  Compensation
• $  5 million:  Fees for Services – primarily professional fees and a shopping campaign
• $  8 million:  Office-Related Expenses
• $14 million:  Travel and Conferences
• $ 2 million:  Other Expenses

129 employees received $22 million in compensation (compared to 126 employees receiving $19 million in 2020) which equates to an average compensation of $170,000.  However, only 55 employees received more than $100,000 in compensation (compared to 54 employees in 2021) with the 7 most highly compensated reported to be:

• $6,841,643:  Matthew R Shay, President and CEO
• $1,023,477:  David French, SVP, Gov’t Relations
• $  752,839:  William Thorne, SVP, Public Relations
• $  795,267:  Stephanie Martz, General Counsel
• $  514,026:  Susan Newman, SVP, Conferences
• $  424,202:  Artemis Sakell, Senior Director, Exhibits and Sponsors
• $  361,075:  Martine Reardon, EVP, Chief Marketing Officer

The 7 most highly compensated employees received $11 million in compensation in 2021, or in other words 6% of the employees received 50% of total compensation.  If total compensation were adjusted to exclude the 7 most highly compensated employees, then 122 employees were compensated $11 million, which equates to an average compensation of $90,000.

The President and CEO, Matthew R Shay received more than $6.8 million in compensation in 2021 to oversee a relatively small non-profit whose primary source of income is conventions. It is also interesting to note, Mr. Shay received $27 million in compensation from 2016-2021:

• $6,841,643:   2021 
• $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 and $700,000 in 2021.

39 independent contractors received more than $100,000 in compensation. The five most highly compensated were reported to be:

• $1,002,821:  The Freeman Companies, of Dallas, TX for show management
• $  867,233:  Bluetext LLC, of Washington, DC for marketing strategy
• $  729,200:  Craft Media Digital, of Washington, DC for advertising
• $  480,000:  Tusk Strategies, of NY, NY for show strategy
• $  300,000:  Consovoy McCarthy, Arlington, VA for reconciliation campaign

In closing, the NRF is a small trade association that primarily relies on trade shows/conventions for most revenue although membership dues provide about 15% of revenue.  Most revenue is spent on compensation (including nearly $7 million to the CEO and $4 million to the next 6 most highly compensated employees), travel, conferences, and fees for outside services.

At year-end 2021, the NRF had $16 million in net assets (compared to $20 million at the beginning of the year).

To read the IRS Form 990 (2021 for the year ending Feb 28, 2022), click here.