Steve Goldberg sent questions to ZOA National Executive Director David Drimer regarding Mort Klein’s $1.5 million compensation in 2013, and Mr. Drimer refused to answer “under advice of counsel.” Read the correspondence below.
From: Steven Goldberg <firstname.lastname@example.org>
Date: Wed, Feb 4, 2015 at 2:53 PM
Subject: Re: your query about Klein 2013 compensation
To: “David Drimer (ZOA)” <DDrimer@zoa.org>
Thanks for the response. I accept your invitation to ask further questions. Here they are:
1. Was the $1.5 million in total compensation for 2013 money that belonged to ZOA before it was paid to Mort as salary or put in the trust for his benefit? Put another way, were ZOA’s assets reduced by that $1.5 million?
2. Will Mort receive the $1.5 million? If so, when is he eligible to take it?
3. When did the Board approve this compensation to Mort, and are there minutes?
3. The Form 990 for 2008 reflects that Mort received total compensation of more than $1.2 million that year. I thought that figure included money set aside for his retirement. Is that correct? If so, how much, and why such a large amount again in 2013?
4. Who was the 3rd party compensation consultant who recommended such a large payment to Mort, when was he retained, when did he make his recommendation, was it in writing, and was it ever shared and discussed at a board meeting before or during 2013? If so, are there minutes of that meeting?
5. Who was the ERISA attorney who “reviewed in depth” the compensation to Mort, did he actually approve the figure, who suggested it to him, did he ever issue a report in writing, and was it ever shared and discussed at a board meeting before or during 2013? If so, are there minutes of that meeting?
6. My review of the recent Form 990s indicates that for the 6 years running from 2008 through 2013 Mort received total compensation of $4,942,112, which averages out to $823,685,333 per year. For the 13 years from 2001 through 2013 the Form 990s show that Mort received total compensation of $6,482,136, which averages out to $496.620.145, Do you disagree with my calculations?
7. Did the Board ever vote to approve such compensation? If so, when, and are there minutes?
8. How does Mort’s compensation over the 6 year period from 2008 through 2013 compare to the compensation of presidents of other Jewish organizations? Looking at the Form 990s, it appears that Mort’s compensation has comprised about 30% of the total donations do the ZOA during that time period. Are there other Jewish organizations who have paid their presidents such a high percentage? Is there any organization who has paid its president even 15% of total donations over that time period or in any one year? Has the Board ever concerned itself with whether Mort’s compensation is reasonable as a percentage of donations as compared to other Jewish organizations? If so, when did it consider the issue, what was done to investigate it, and what were the results?
9. What was Mort’s compensation for 2014, when was it approved by the board, and what were total donations for the year?
I understand why Mort is defensive about this, and you are doing an excellent job trying to justify a decision you did not make. Nevertheless, a non-profit that pays its president more than $1.5 million in a calendar year without a board meeting needs to be able to explain why that happened. If no present board member has asked these questions, it speaks volumes about the quality of board oversight.
I look forward to your response.
Under advice of counsel, I am not going to answer each of your questions individually. I can pretty much summarize all the 9 questions into one. You apparently feel Mort was/is paid too much. You are certainly entitled to your opinion, but that opinion doesn’t jibe with the opinion of at least a majority of the Board – if not the entire Board — of the ZOA.
Mort did NOT receive excess compensation. The ZOA clearly intended to pay the compensation and approved the compensation – it’s reported in the 990. It is a matter of public record. This includes the clearly delineated amounts from the Rabbi Trust.
Many people within the ZOA have been involved in this, including outside counsel and compensation consultants, and the ZOA feels it has appropriately dealt with, approved, and reported Mort’s compensation. Rabbi trusts are appropriate methods of dealing with deferred compensation – and his payments above base salary simply come from that trust arrangement. I note again these were properly documented on the relevant schedules in the 990 over the relevant range of activity/timeframes.
I acknowledge this is not as fulsome an answer as you had hoped, but re-creating the history of all of this would be overly burdensome given the other pressing matters I have to deal with. Most importantly, Mort’s compensation has been appropriately reviewed by the appropriate bodies within the ZOA and transparently reported on its IRS filings.
David P. Drimer, National Executive Director
4 East 34th Street
New York, NY 10016
Work (212) 481-1500 Cell (917) 929-6219