Executive Compensation at Dairy Management (2024)

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 any company producing products that use dairy, 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 charged with the promotion and marketing of dairy products.

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 28,000 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 (Thomas Gallagher in 2021).

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 or for reproduction (bulls for semen, cows for calves). Those images of the happy cows with their calves 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 (2024) shows that DMI raised $166 million.  Expenses totaled $166 million (historically, expenses have matched revenue) with the two largest expenses domestic marketing ($82 million) and compensation ($34 million) for the 322 employees.  The average compensation per employee was $106,000.

173 employees received more than $100,000 in compensation.  The 7 most highly compensated employees were reported to be:

• $717,658:  Barbara O’Brien, President
• $589,723:  Krysta Laverne Harden, EVP
• $530,861:  Quinton D Baily, CFO
• $460,770:  Paul Ziemnisky, EVP
• $445,480:  Anne Marie Krautheim, CEO, Gen Youth
• $443,480:   Martha Scott Poindexter, EVP/USDEC
• $426,236:  Joanna Hunter, EVP

As illustrated above, the 7 most highly compensated employees received nearly $4 million in compensation in 2024.  2 of the 7 (29%) most highly compensated employees are male while 5 (or 71%) are female. The most highly compensated employee was Barbara O’Brien who received $717,658 followed by Krista Laverne Harden who received $589,723 in 2024.

With regards to compensation, it is interesting to note:

• 322 employees received $4 million in compensation in 2024.
• 173 of the 322 employees received more than $100,000 while 149 received less than $100,000 in 2024.
• In 2024, the 7 most highly compensated employees received nearly $4 million so the remaining 315 employees received $30 million.  166 of the 315 employees received more than $100,000 while 149 employees received less than $100,000.  Since the 149 employees could not receive more than $15 million, the other 166 employees received at least $15 million (or an average of $90,000).

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

123 independent contractors received more than $100,000 with the 5 highest listed below, all for “agency services”:

• $5 million:  Manifest, of NY, NY for agency services. (marketing agency)
• $4 million:  Domino’s Pizza, of Ann Arbor, MI for agency services
• $4 million:  National Milk Producers Federation, of Chicago, IL for agency services (trade association/lobbying group)
• $3 million:  Daniel J Edelman, Inc. of Chicago, IL for “agency services” (public relations)
• $3 million:  PIPA, of Dixon, CA for agency services (AI systems company)

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 $170 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 $106,000 and the 7 most highly compensated employees receiving nearly $4 million in 2024.

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 (2024), click here.