UPDATED
I’m a big fan of ProPublica, the not-for-profit organization that in the past year has become an important source of excellent journalism. I’m not a fan of the pay that’s going to the top people.
As Alan Mutter first reported this week, a fair chunk of the money ProPublica has raised is going toward some breathtaking paychecks. Paul Steiger, the editor in chief, took home a 2008 salary of $570,000, Mutter noted.
Steiger isn’t the only person there who’s doing well by doing good, according to ProPublica’s IRS disclosure (PDF, 2.7 MB). Steven Stephen Engelberg, the managing editor, pulled down more than $450,000 in salary total compensation, which includes $325,000 salary and (see comment below) almost $120,000 in relocation expenses. (Note: my apology to Engelberg for my original misstatement of his compensation as all salary.)
Both of these men are terrific journalists and leaders. That’s not in dispute. But their princely salaries, while entirely legal, send a message that ultimately detracts from the mission.
Richard Tofel is ProPublica’s general manager (he holds official posts of treasurer and secretary; he made just under $300,000 in 2008), and former Steiger colleague at the Journal.He justified Steiger’s pay in a comment on a Reuters blog, noting that Steiger had made more, including money from stock options, at the Journal. So what? The Journal was a huge organization by comparison to ProPublica, and it was part of a for-profit enterprise.
The salaries aren’t in the ballpark of what some of the biggest nonprofits pay — including stunning compensation at a few hospitals, megabucks arts institutions and big universities. But for the size of the operation, the ProPublica top-gun salaries are mind-boggling.
They can spin it any way they want, but they can’t really justify this kind of pay for people at a relatively small non-profit. In the end, this will hurt ProPublica, not help.
UPDATE
Tofel responds:
Dan, you’re more than entitled to your view, of course, and I have great respect for your work. But this post is yet another indication of why people should make phone calls or emails before they finish reporting a story. Three quick points: 1) Steve Engelberg’s salary at the end of 2008 was $325,000, not $450,000. The “reportable compensation” on our Form 990 included relocation expenses, which we would have told you if you had checked. 2) My only point in the Reuters blog comment was to refute the point of that original post. It alleged that Paul Steiger’s comp had increased 4% from 2006 at the Journal to 2008 at ProPublica when in fact it fell 59%. The difference seemed worth noting– and was again the consequence of publishing without checking. 3) While I do hold the corporate offices of treasurer and secretary, I’m employed as the general manager of ProPublica.
My response:
As noted in the corrected post, I got Engelberg’s money wrong, and major apologies on that. I should have read the IRS form more closely and/or called Tofel, as he rightly says.
What Steiger made as head of an enormous news operation at a for-profit company still doesn’t seem relevant to me. I was very well-compensated (more than I ever imagined I’d make as a writer when I started my print newspaper career) when I was a columnist at Knight Ridder. Since leaving in 2005, my employment compensation hasn’t reached half of what I got in salary and benefits during the apex of my time at the company.
So I believe the issue I raised is valid. According to Charity Navigator’s 2009 survey of CEO compensation at medium to large charities, the average CEO pay (including bonuses and expenses) in New York (the highest regionally), where ProPublica is based, was about $220,000 — which is less than half of what Steiger makes and a lot lower than Engelberg’s salary.
Again, I have the highest respect for what ProPublica and its leaders are doing. But I continue to believe that these salary levels are inappropriate, and damaging to this otherwise great enterprise in the long run.
Dan, you’re more than entitled to your view, of course, and I have great respect for your work. But this post is yet another indication of why people should make phone calls or emails before they finish reporting a story. Three quick points: 1) Steve Engelberg’s salary at the end of 2008 was $325,000, not $450,000. The “reportable compensation” on our Form 990 included relocation expenses, which we would have told you if you had checked. 2) My only point in the Reuters blog comment was to refute the point of that original post. It alleged that Paul Steiger’s comp had increased 4% from 2006 at the Journal to 2008 at ProPublica when in fact it fell 59%. The difference seemed worth noting– and was again the consequence of publishing without checking. 3) While I do hold the corporate offices of treasurer and secretary, I’m employed as the general manager of ProPublica.
Dick, I’m putting this comment in the body of the post, with a reply to come.
I don’t believe your word “salary” is correct for Engelberg’s $450,000 . If you read further into the PDF version of the 990, you’ll see that his salary is the same as Tofel’s, just under $300,000, but that in the first year there was a one-time payment of $150,000 — perhaps moving expenses or a buyout of a house? So “compensation” would be the right word.
That’s the way great editors get recruited, with salaries. There’s no need to spin this in any way. Just because we can see what his salary is, doesn’t mean he’s greedy or somehow should not have it. If Propublica was started by someone else who warranted a smaller salary, than it wouldn’t be as influential as it’s been. The journalistic connections of those involved are more than enough to justify the salaries.
And just because the rest of the journalists we all know are broke, doesn’t mean no one else shouldn’t be able to make money either.
Hope this post was well read enough to justify picking apart an organization that’s actually doing something.
These salaries should be subject to supply and demand. The simple truth is that executives for an organization of that size, no matter their pedigree, are not worth that much in this marketplace. There are plenty of top-flight editors and journalists willing to work for much less. The same is true for Dick on the business side — an apples-to-apples comparison is an associate of mine who’s a senior business executive at a major print news brand who manages more than $100 million in budget and more than 100 people making the same total comp. While I understand that there is a “founders’ premium” priced into these salaries, they seem ridiculous and self-serving. Non-profit journalism appears to be like non-profit medicine (where the participants do quite nicely, thank you).
$150K for relocation expenses? To work for a Web site?
Steiger, Tofel etc. have found another cow to be milked.
The salaries of ProPublica’s highest paid senior reporters at around $150,000 are comparable to the earnings of senior New York and Washington-based journalists with decades of experience and a demonstrated track record. The differentials given top editors in commercial news organizations and, it would appear, in the emerging non-profit sector are out of line with what they actually contribute to the editorial process, IMHO. Better to lop off a hundred grand and hire two extra entry-level reporters.
Is it seemly for Tofel to go around defending his boss’s salary? Have Steiger and Engelberg said anything about it? Propublica gets substantially all of its money from Herb and Marion Sandler, rather from other donors. So in a sense it is really the Sandlers who are subsidizing these two gentlemen rather than the public. Take a look at the salaries of the Center for Investigative Reporting. They are more in line with what people should be making at these operations.
I don’t see any reason why he shouldn’t defend his colleagues. Maybe they should be defending themselves, though…
$450,000 = 1,363,636 packages of Ramen noodles at 33 cents each from the Delano Iga grocery store on Van Ness Avenue in San Francisco.
But let’s assume the more conservative figure.
$325,000 = 984,848 packages of Ramen noodles at 33 cents each from the Delano Iga grocery store on Van Ness Avenue in San Francisco.
Surely grunts will consider the difference noteworthy.
This is stunning, and disturbing. I agree with Merrill’s posting above — better to cut these ridiculous salaries and hire more journalists. Or change the name of this organization from ProPublica to ProSteiger. And $150,000 for relocation expenses? Did they have to pilot a couple of yachts through the Panama Canal?
Ramen’s cheaper at Costco, George; if you worked for MediaNews, you’d already know that.