Executive Compensation at the American Beverage Association (2022)

The American  Beverage Association is a Washington, DC-based non-profit 501 (c) (6) trade association representing America’s non-alcoholic beverage industry. Originally established in 1919 as the American Bottlers of Carbonated Beverages, the organization was renamed the National Soft Drink Association in 1966, when the soft drink market began growing rapidly in the USA.

In 2004, the organization’s name was changed to the American Beverage Association (ABA), which coincidently was about the time negative press was on the upswing calling out the soft drink industry for the copious amount of sugar and high fructose corn syrup in soft drinks. In subsequent years, as the government imposed taxes on these beverages siting the lack of nutritional benefits and the great cost to the consumer and the health care industry, the ABA has fought attempts by stepping up their lobbying efforts.

Basically, the ABA is a lobbying group representing the special interests of those in the non-alcoholic beverage industry, including the companies making or bottling regular and diet sodas. It is interesting to note the chair of the ABA, Bill O’Brien  is the CEO of the Reyes Coca-Cola Bottling Company and the majority of directors are affiliated with Coca Cola, Pepsi, Dr. Pepper and Red Bull.

So, what exactly does the ABA do?  The ABA collects about $100 million ($97 million in 2022) in revenue annually which primarily comes from two sources:  “SAB assessments” and membership dues. The “SAB assessment” is the largest source of revenue ($74 million in 2022) but it is unclear where these funds come from although a guess would include the big players in the non-alcoholic beverage industry including Coca Cola, Pepsi, Dr. Pepper, and Red Bull.  Membership dues totaled $18 million in 2022.

Expenses totaled $95 million in 2022 with the largest expenses reported to be fees to outside independent contractors ($55 million), industry projects ($22 million) and compensation ($14 million).

The Form 990 (2022) reports the ABA compensated 48 employees $14 million in 2022, which equates to an average compensation of $291,000.  However, only 29 employees received more than $100,000 in compensation which means there are some very highly compensated employees at the ABA, including the 8 most highly compensated employees who received $7 million:

• $3,174,592:  Katherine Lugar, President and Chief Executive
• $1,118,323:  Kevin Keane, EVP Government and Public Affairs
• $  731,841:  Amy E Hancock, EVP, Secretary and General Counsel
• $  660,018:  Robert A Micek, EVP and CFO
• $  439,894:  Mark Hammond, Asset Manager
• $  433,584:  Sean Krispinsky, SVP and Deputy General
• $  432,601:  Meredith Potter, SVP, Public Affairs
• $  368,814:  Ricardo D Rivas, VP, CA

If the 8 employees listed above were excluded and the $7 million of their compensation is deducted from the total compensation, then the remaining 40 employees received $7 million, which equates to an average compensation of $175,000.  21 of the 40 employees received more than $100,000 (but less than $368,000) while 19 received less than $100,000.

Of the 8 employees listed above, 3 are female including the most highly compensated employee, while 5 are male).

The 8 most highly compensated employees received $26 million in compensation from 2018-2022 (note:  highly compensated employees in 2018-2021 but not in 2022 are not included):

Katherine Lugar:  Total Compensation 2018-2022:  $9 million

• 2022:  $3,174,592
• 2021:  $2,224,290
• 2020:  $1,827,366
• 2019:  $1,071,035
• 2018:  $  531,945

Kevin Keane:  Total Compensation 2018-2022:  $5 million

• 2022:  $1,118,323
• 2021:  $  948,926
• 2020:  $  920,502
• 2019:  $  939,035
• 2018:  $  796,437

Amy Hancock:  Total Compensation 2018-2022:  $3 million

• 2022:  $731,841
• 2021:  $604,069
• 2020:  $565,115
• 2019:  $552,86
• 2018:  $575,929

Robert Micek:  Total Compensation 2022:  $0.7 million

• 2022:  $660,018

Mark Hammond:  Total Compensation 2018-2022:  $5 million

• 2022:  $  439,894
• 2021:  $  968,944
• 2020:  $  708,356
• 2019:  $1,3199,639
• 2018:  $1,265,462

Sean Krispinsky:  Total Compensation 2018-2022:  $2 million

• 2022:  $433,584
• 2021:  $390,672
• 2020:  $369,950
• 2019:  $355,060
• 2018:  $318,385

Meredith Potter:  Total Compensation 2022:  $0.4 million

• 2022:  $432,601

Ricardo Rivas:  Total Compensation 2022:  $0.4 million

• 2022:  $368,814

The IRS Form 990 also reports the ABA paid for health club or social club dues or initiation fees. Specifically, the president had access to a health club (her compensation of $3.2 million wasn’t enough).

It is important to note 18 independent organizations received more than $100,000 in compensation with the five highest reported to be:

• $1,132,000:  Public Opinion Strategies, of Alexandria, VA for professional fees
• $  618,800:  Breezeway Consulting, of Somerville, MA for professional fees
• $  560,000:  BGR Gov’t Affairs, of Washington, DC for professional fees
• $  469,944:  Nielson Merksamer Parrinello Gross and Leo for professional fees
• $  516,480:  Keybridge Research, of Washington, DC for professional fees

It is important to note the ABA reported paying nearly $51 million in other fees to non-employees for services yet the ABA reports the most an independent contractors received was $1.1 million above, so there appears to be an error.  The ABA also paid $3.5 million in legal fees yet a law firm is not listed above either.

To read the IRS Form 990 (2022), click here.