It is that time of the year for me when I need to dole out the cash to renew my ACS membership. For the first time I have to pay the full membership price of $145. The process is made more complicated than usual since I need to switch from the graduate student member rate to the full member rate and there is no button available to do it from the website. :sigh:
So with member dues on the brain I went to investigate why they are set at $145. In 1986 the dues were $70 and it was decided to set all future dues to that inflation corrected price. $145 may seem like a lot of money but the ACS Committee on Budget and Finance’s website points out that it is a very middle of the road amount when compared to other scientific societies.
|American Institute of Chemical Engineers||$199||40,000|
|American Association of Clinical Chemistry||$185||10,000|
|Association for Psychological Science||$179||20,000|
|Royal Society of Chemistry||$160||46,000|
|American Association for the Advancement of Science||$146||120,000|
|American Chemical Society||$140||154,000|
|American Society for Biology and Molecular Biology||$140||12,000|
|American Nuclear Society||$140||11,000|
|Society of Plastics Engineers||$140||20,000|
|American Physiological Society||$130||10,500|
|American Physical Society||$118||46,000|
|American Ceramics Society||$110||6,000|
|Geological Society of America||$70||22,000|
However, that is not a fair comparison to make. Whenever the topic of executive compensation comes up at ACS we’re always reminded that ACS is a huge publishing house connected to a nonprofit, thus salaries and benefits of the top executives are matched to norms in the publishing industry. In one case it is fair to compare something to scientific society norms, in the other case we have to include the norms of a publishing house.
Out of my own curiosity I dug into the numbers behind member dues and have found that total dues were $15,500,000 and brought in $2,200,000 in net revenue for 2009. So how much does the society make per year? Do we make enough as a society to forgo paying dues into 3 digits? Below is a table showing the finances of the society, I’ve also included the income payed out to the top executives for comparison
|Name / Gross Income||2009||2008||2007||2006||2005|
|Flint H. Lewis||$363,406||$301,084||$285,271||$273,730|
|Brian A Bernstein||$423,540||$345,076||$347,163||$324,360|
|Robert J Massie||$1,038,836||$1,826,527||$792,030|
|Brian D Crawford||$590,612||$416,940||$401,004|
|John R Sullivan||$392,088|
|Matthew J Toussant||$451,665||$357,233|
|Brian C Bergner||$411,411|
|Benjamin W Jones||$397,395|
|Peter E Roche||$364,055||$577,185||347,935|
|Rudy M Baum||$359,703|
|Robert D Bovenschulte||$1,229,387||$620,360||$617,030|
|James A Bryne||$425,473||$410,407|
|Sylvia A Ware||$433,678|
|Net Assets (unrestricted)||$123,900,000||$60,000,000||$212,000,000||$281,000,000||$211,000,000|
The society made enough net revenue in 2009 to easily refund 1/3 of our member dues, but it would never do that as I’ll explain. If you look at the table and try to match the society’s executive incomes to performance you will have a hard time, if you can see a pattern please let me know. In 2008 as the society’s net assets decreased in value by 72% the income of the executives increased. As the total revenue of the society brought in slowly increased, the executive income increased faster. As the net revenue of the society has remained flat, besides the small peak in 2009, the executive income increased. So how exactly is the salary and benefits of the top executives valued, it seems disconnected from normal metrics of financial health?
The society will hire an outside firm to decide what the compensation should be. The firm will take into consideration that ACS is a publishing house and a non-profit. The firm will also consider the health of the global economy and other factors and will set certain benchmarks for the executives to meet in order to get bonuses on top of their paychecks. So the reason their income seems decoupled from performance is because the benchmarks they must meet are already coupled to the passions and whims of the national economy.
I will argue that this road for ACS is unhealthy.
If I ask any top executive at ACS what their job is, I’m sure they will tell me that their job is to return as much value back to ACS members while generating as much revenue they can for the society. The society will indirectly self-select individuals that can maximize that function. But this leads to the horrible disease of group-thinking. I have no doubt that Rudy Baum actually dislikes open-access, but I also have no doubt that ACS has indirectly placed people in positions of influence who will maximize the function of revenue vs. value.
I have faith that the net revenues made by the society for 2009 will be used for a good purpose. Maybe it’ll be put towards shoring up the losses in net assets, maybe it’ll be used to make the budget for next year more affordable. However, I do know it will never be given back to members as a rebate on their membership dues. A rebate would be considered an expense and would decrease net revenue the society made the following year and thus decrease bonuses.
There is no clear answer to what would make my favorite chemistry club healthier and more affordable, but the current tethering of compensation and salaries to the same wonderful metrics that financial institutions use seems illogical.