Executive Compensation at Dairy Management (2023)

Dairy Management Inc (DMI) is the big organization that most people haven’t heard of because unless you’re a dairy producer, work in the dairy industry, or work in the corporate offices of Pizza Hut, Taco Bell, Dominoe’s, or KFC, you would have no reason to know that this non-profit, tax-exempt 501 (c) (6) is the most powerful non-profit dairy organization in the country.

Considered a “check-off” program authorized by Congress but responsible to their members, DMI’s mission is to increase consumption of dairy products by finding more ways to get dairy products to the public including assisting fast food companies with menu items.

How does DMI do this? By requiring America’s 37,000 plus dairy producers to pay 15 cents (and dairy importers to pay 7.5 cents) for every 100 pounds of milk (a gallon of milk weighs 8.6-11.6 pounds so 100 pounds of milk is roughly 10 gallons, meaning US dairy farmers pay DMI about 1.5 cents per gallon for their services).  These funds are used to “fund programs and aimed at promoting dairy consumption and protecting the good image of dairy farmer, dairy products, and the dairy industry” the includes paying some employees up to $2.7 million annually.

What they don’t tell you is that in order to produce milk for human consumption, the cows have to be pregnant (primarily by artificial insemination) or given birth to a calf, who is taken away from the mother to either be grown to become a dairy cow (females) or slaughtered at a few months old for veal (males) or raised as a beef cow. Those images of the happy cows in the fields by a barn are simply not the truth for most cows in the industrialized dairy industry.

The most recent IRS Form 990 available (2023) shows that DMI raised $178 million.  Expenses totaled $178 million (historically, expenses have matched revenue) with the two largest expenses domestic marketing ($101 million) and compensation ($32 million) for the 323 employees.  The average compensation per employee was $100,000.

166 employees received more than $100,000 in compensation.  The 8 most highly compensated employees were reported to be:

• $717,359:  Barbara O’Brien, President
• $565,375:  Krysta Laverne Harden, EVP
• $524,256:  Quinton D Baily, CFO
• $454,887:  Paul Ziemnisky, EVP
• $430,484:  Anne Marie Krautheim, CEO, Gen Youth
• $428,349:   Martha Scott Poindexter, EVP/USDEC
• $425,012:  Thomas Gallagher, Former CEO (retired 11/2021)
• $401,884:  Joanna Hunter, EVP

As illustrated above, the 8 most highly compensated employees received $4 million in compensation in 2023.  3 of the 8 (38%) most highly compensated employees are male while 5 (or 62%) are female. The most highly compensated employee was Barbara O’Brien who received $717,359 followed by Krista Laverne Harden who received $565,375 in 2023.

The 8 most highly compensated employees received nearly $24 million in compensation from 2015-2023:

Thomas Gallagher:  Total Compensation 2015-2023:  $10 million

• 2023:  $  425,012
• 2022:  $  850,025
• 2021:  $2,680,255
• 2020:  $  912,642
• 2019:  $  887,930
• 2018:  $  875,930
• 2017:  $  899,810
• 2016:  $1,011,379
• 2015:  $1,361,753

Barbara O’Brien:  Total Compensation 2015-2023: $6 million 

• 2023:  $717,359
• 2022:  $720,919
• 2021:  $804,571
• 2020:  $648,355
• 2019:  $646,204
• 2018:  $654,451
• 2017:  $649,419
• 2016:  $591,494
• 2015:  $540,585

Krysta Laverne Harden:  Total Compensation:  2020-2023  $2 million

• 2023:  $565,375
• 2022:  $544,034
• 2021:  $529,813
• 2020:  $419,586

Quinton D Baily:  Total Compensation:  2017-2023:   $3 million 

• 2023:  $524,256
• 2022:  $490,661
• 2021:  $471,634
• 2020:  $420,437
• 2019:  $365,084
• 2018:  $370,733
• 2017:  $246,542

Paul Ziemnisky:  Total Compensation 2023:  $0.5 million

• 2023:  $454,887

Anne Marie Krautheim:  Total Compensation 2023:  $0.4 million

• 2023:  $430,484

Martha Scott Poindexter:  Total Compensation 2022-2023:  $1 million

• 2023:  $428,349
• 2022:  $406,305

Joanna Hunter:  Total Compensation 2023:  $0.4 million

• 2023:  $401,884

3 highly compensated employees in 2022 were not listed as highly compensated employees in 2023.  These 3 employees (for former employees) received $13 million from 2015-2022:

Elizabeth Engelmann:  Total Compensation:  2017-2022:  $3.5 million 

• 2022:  $894,952
• 2021:  $566,438
• 2020:  $536,660
• 2019:  $522,055
• 2018:  $532,869
• 2017:  $478.809

Gregory Miller:  Total Compensation:  2015-2022:  $6 million 

• 2022:  $  598,048
• 2021:  $  588,886
• 2020:  $  579,296
• 2019:  $  559,656
• 2018:  $  639,651
• 2017:  $1,546,760
• 2016:  $  579,665
• 2015:  $  656,411

Jean H Ragalie-Carr:  Total Compensation:  2017-2022:  $3.5 million

• 2022:  $434,177
• 2021:  $434,341
• 2020:  $501,961
• 2019:  $482,610
• 2018:  $494,641
• 2017:  $857,405

With regards to compensation, it is interesting to note:

• 323 employees received $32 million in compensation in 2023.
• 166 of the 323 employees received more than $100,000 while 157 received less than $100,000 in 2023.
• In 2023, the 8 most highly compensated employees received $4 million so the remaining 315 employees received $28 million.  158 of the 315 employees received more than $100,000 while 157 employees received less than $100,000.  Since the 157 employees could not receive more than $15.7 million, the other 158 employees received at least $12.3 million (or an average of $78,000).

The IRS Form 990 also reports DMI paid for first class travel, health or social club dues or initiation fees, and tax indemnification and gross up payments.  See Schedule J (link is below) for more detail on these expenses.

It is also important to note DMI operates out of an office in Rosemont, Illinois in which the following organizations also operate out of:

• United Dairy Industry Association, a 501 (c) (6)
• National Dairy Council, a 501 (c) (3) controlled by United Dairy Industry Association
• Innovation Center for US Dairy, a 501 (c) (6) controlled by DMI
• Dairy Research Institute, a 501 (c) (3) controlled by DMI

135 independent contractors received more than $100,000 with the 5 highest listed below:

• $5.9 million:  Mischief/No Fixed Address*, of Brooklyn, NY for promotion
• $3.6 million:  NFL Properties, of NY, NY for promotion
• $4.1 million:  Daniel J Edelman, Inc. of Chicago, IL for “agency services” (PR)
• $3.4 million:  National Milk Producers Federation, of Chicago, IL for agency services
• $3.2 million:  United Dairymen of Arizona, of Tempe, AZ for promotion

Mischief/No Fixed Address is an advertising agency where “we make work that creates a stir.”

In summary, dairy producers in the United States are required to pay 15 cents per 100 pounds of milk (or about 1.5 cents per gallon) adding up to $180 million annually to DMI who works to increase demand for milk products, primarily through advertising and using more than 300 employees working to increase the public’s use of milk.

DMI employees are well compensated with the average compensation per employee $100,000 and the 8 most highly compensated employees receiving $4 million in 2023 while the 8 most highly compensated employees received nearly $24 million from 2015-2023 (and this does not include highly compensated employees in any of the years 2015-2022 who were not employed at DMI in 2023) Add the earnings of 3 former employees who were not listed in 2023, and that $24 million jumps to $37 million for 2015-2023.

DMI paid for first class air travel, health or social club dues or initiation fees, and tax indemnification and gross up payments.

The question arises:  Why is the government involved in a check-off program forcing milk producers to contribute to an advertising and promotion campaign (that includes providing high compensation packages to many employees, first class travel, and other perks) instead of allowing free market choices in this industry?  And, I wonder how dairy farmers would feel about the compensation packages, first class travel, companion travel, and health and social club dues or initiation fees?

To read the IRS Form 990 (2023), click here.