Special Report – The rising levels of pay – Professional Golfers’ Association
Liz Comte Reisman
Golf’s Most Powerful Executive is also its highest paid, but PGA Tour Commissioner Tim Finchem still trails the income level of his top players, other sports commissioners and maybe even his predecessor. Those are some of the findings of Golf Digest’s latest look at executive compensation, gleaned from the most recent tax returns filed by the game’s leading organizations.
Finchem’s $2.18 million compensation package from 1998 was more than double that of his closest pursuer (see chart). Is it too much? “For someone to hold the steering wheel on an organization that generates that kind of money, I don’t think it’s out of whack by any means,” says veteran tour player Nick Price. “Anyone in a similar position in corporate America would have a salary just as high, and probably higher.”
In fact, compared to other sports, Finchem’s compensation level, including his base pay, appears almost modest. In the 1998-’99 fiscal year, NFL Commissioner Paul Tagliabue earned a reported $8.6 million in total compensation. NBA Commissioner David Stern leads all sports commissioners with a reported $9 million a year.
Of course, those leagues generate much greater revenue streams than golf, especially from network television.
“These people, who are basically executives of associations, bask in the reflected glory of their stars,” says Graef Crystal, an executive compensation expert and editor of The Crystal Report. “You don’t see the head of the American Red Cross making this kind of money, and that’s because the people who benefit from the American Red Cross don’t make that kind of money. But the players who benefit from the PGA Tour are making a lot of money.”
Finchem trailed the 1998 PGA Tour leading money-winner, David Duval, who took home $2.6 million in official prize money, and the senior tour leader that year, Hale Irwin, who earned $2.9 million. Though Finchem is likely to get a hefty bump from the tour’s new 1999 TV rights deal, it’s unlikely he’ll approach the $6.6 million Tiger Woods earned last year.
Deane Beman reached the $2.7 million level in his 20th and final year (1994) as commissioner. At the rate the tour’s finances are going, Finchem will reach or surpass that mark soon. (Due to the time lag in filing and obtaining tax forms, the numbers reported here are at least a year behind the executives’ current compensation.)The LPGA Tour commissioner also has some ground to make up. The LPGA paid Jim Ritts $489,216 in 1998, making him the highest-paid commissioner in its history. Ritts resigned in 1999 and was replaced by Ty Votaw. Votaw says he will earn about $350,000 in salary and bonus in 2000, his first full year as commissioner.
The highest-paid non-PGA Tour executive is the PGA of America’s CEO Jim Awtrey, whose total compensation was $841,905, according to the PGA’s fiscal 1998 return. The PGA of America’s gross revenues in fiscal 1998 were $223.2 million, including $138.6 million from the sale of PGA International Golf Shows and other Golf Expo-related revenues. The U.S. Golf Association’s Executive Director, David Fay, makes less than half as much as Awtrey ($299,800), within an organization of similar financial scale. USGA gross revenues were $89.7 million in 1998.
Since Finchem took over as commissioner, the tour’s gross revenues increased 45 percent over three years, from $226.6 million in 1995 to $328.2 million in 1998 (excluding Tournament Players Club operations); official prize money on the PGA, Senior PGA and Nike tours increased 47 percent, to $149.4 million; charitable contributions increased 57 percent, to $54.1 million, and player retirement plan assets grew 128 percent, to $167.8 million. Television revenue grew about 29 percent, to $114.5 million. During the same span, the tour has rewarded Finchem with a 56 percent hike in pay.
In 1998, Finchem earned a total base salary of $900,000, an annual bonus of $913,200 and total long-term incentive compensation of $367,713. A portion of his compensation package is paid out of (or allocated to) the for-profit arm of the organization, PGA Tour Holdings Inc. Finchem earned an additional $392,494 under other employee benefit plans, including qualified retirement benefits based on years of service and payable only after retirement. Other tour employees also received benefits not listed in the chart, amounting to as much as $60,000 in 1998.
Golf association executive wages
Tim Finchem* $2,180,913
PGA Tour Commissioner
Jim Awtrey $841,905
PGA of America CEO
Charlie Zink* $777,759
PGA Tour Exec. VP, CFO
Ed Moorehouse* $771,609
PGA Tour Exec. VP, Chief Legal Off.
Paul Bogin $676,800
PGA of America COO
Jesse Holshouser** $519,303
PGA of America CFO
Jim Ritts** $489,216
Ron Price* $385,174
PGA Tour Sr. VP, Finance/Admin.
Donna Orender* $384,513
PGA Tour Sr. VP, Television
Bill Calfee* $338,126
PGA Tour Exec. VP, Competitions
David B. Fay* $299,800
USGA Exec. Director
Henry Hughes* $259,716
PGA Tour Sr. VP, Tourn. Bus. Affairs
Joe Beditz $254,027
NGF President, CEO
Bob Combs* $235,111
PGA Tour Sr. VP, Public Relations
Source: 1998 IRS Form 990s, filed by organizations.
*Figures do not include monies earned under benefit plans, which add up
to as much as $60,000, except for Finchem ($392,494).
**Holshouser left the PGA of America in 1999; Ritts resigned as LPGA
commissioner in 1999.
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