Compensation of Former Irvine Foundation President Draws Scrutiny
PND - Compensation of Former Irvine Foundation President Draws Questions
The San Francisco-based James Irvine Foundation created a compensation and retirement package for former president Dennis Collins that reached $717,000 in 1999, leading some experts to suggest that his compensation warrants examination by the Internal Revenue Service and the state attorney general, the San Jose Mercury News reports.
In 2000, Irvine's chief financial officer told a foundation board member that Collins' 1999 compensation package could be considered excessive, and that Collins, who led the foundation from 1986 to 2002, could be penalized if the IRS ever audited the foundation. A study ordered by the board subsequently showed that while Collins' base salary which increased at an average annual rate of about 7 percent, to $382,000, from 1991 to 2001 was in line with the salaries paid the heads of similar foundations, the amount deferred for his retirement was significantly higher. Much of that income was the direct result of a decision made by the board in 1993 to augment annual contributions to Collins' pension, which had been capped at $30,000, with deferred payments equal to 22 percent of his salary. Moreover, the board agreed to guarantee a minimum 8 percent return on his retirement account and went a step further by tying its performance to that of the foundation's endowment. Thus, in 1999, when the value of the foundation's endowment jumped 51 percent, Collins' deferred income for the year topped $381,000, in addition to his base salary of $336,000. The board subsequently placed a cap on the account so that earnings from it wouldn't exceed 80 percent of his final annual salary.
In an e-mail to the Mercury News, Collins said that the deferred income shouldn't have been counted as compensation in the years it was set aside because he didn't receive it until he retired. "The board was assiduous in benchmarking my compensation against comparable data," Collins said. "Lawyers and compensation experts advised them that the numbers clearly fell within the acceptable range of compensation at similar institutions."
Under Collins' leadership, the foundation increased its grantmaking budget to $73 million from $12 million and received praise for its work in race relations and poverty.
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San Jose Mercury News
Primary Subject: Philanthropy and Voluntarism
Location(s): California, San Francisco