Last spring, at the height of the COVID-19 pandemic in New York City, the Guggenheim Museum furloughed 92 employees, projecting a steep shortfall in revenue as virus-related shutdowns wreaked havoc on attendance numbers. Six months later, just weeks before reopening to the public, the museum laid off two dozen workers — 11% of its staff — and announced salary reductions of up to 25% for senior employees, including its director, Richard Armstrong.
But Armstrong’s total compensation increased by 40% in 2020 from the previous year, the museum’s most recent IRS filings show — from $1,073,991 in 2019 to $1,504,081 in 2020. The totals are an aggregate of base compensation, which rose from $828,001 to $857,491, and “other compensation,” which shows a more significant surge, from $245,990 in 2019 to $646,590 in 2020.
The numbers are reported on the museum’s publicly availably 990 forms and were first revealed by A Better Guggenheim, a coalition of current and former workers, after they received an anonymous submission. On their Instagram page, the group wondered how it could be true that Armstrong took a salary cut, as stated on the tax forms and advertised by the museum, while his overall compensation ballooned.
“It is devastating to find out that Armstrong and other executives benefitted from pay increases while our colleagues lost their jobs, especially during a global crisis when stability is needed the most,” a member of A Better Guggenheim, who asked not to be named for fear of retaliation, told Hyperallergic. The group also pointed to increases in reported total compensation for Nancy Spector, the museum’s former chief curator, who stepped down last October; and Sarah Eaton, its senior marketing director.
The answer to Armstrong’s rising earnings may lie in a so-called deferred compensation plan, a mechanism that allows employers to set aside or “defer” income to be disbursed at a later date. When Hyperallergic asked the Guggenheim why the director’s total compensation increased, a Guggenheim spokesperson said that Armstrong took a 25% pay cut from May through December 2020, but that “the reduction did not apply to compensation earned in prior years that was paid in 2020.”
|Base Compensation||Retirement and Other Deferred Compensation||Nontaxable Benefits||Total|
The museum’s 990 filings show hundreds of thousands of dollars in deferred compensation for Armstrong since 2017. His base compensation — a figure that usually corresponds to salary, but can include other fees as reported on the employee’s W-2 form — has otherwise remained relatively steady, though it was the highest it’s ever been in 2020.
In 2020, Armstrong received $613,500 in deferred compensation for “continued service through January 2021,” according a note in Schedule J, an addendum to Form 990. The note specifies that the money would be paid out in two batches — half of it was reportedly disbursed in January 2021, and the other half is set to be paid out in May 2022.
A spokesperson for the museum told Hyperallergic that deferred compensation is “part of [Armstrong’s] multi-year contract which was determined by the Board of Trustees in 2019.” The museum declined to provide Armstrong’s actual salary figure or a breakdown of his base compensation. A certified public accountant consulted for this article also noted that a column on Schedule J designated for any compensation listed as deferred in the previous year’s form and paid out the current year reads “zero.” The museum declined to clarify why compensation earned by Armstrong in prior years and paid in 2020 was not reported in this column.
In recent years, and especially during the pandemic, museum workers have drawn attention to pay disparities across their institutions. A recent survey conducted by the Association of Art Museum Directors found that salaries for the highest-ranking museum officials actually saw an uptick in 2020. And while nonprofits are obligated to disclose financial information to the public, via documents such as 990 forms, pay opacity remains a problem — particularly in organizations employing high-earning executives with cushy compensation packages.
“The declarations of nonprofit leaders taking either compensation or bonus cuts during the COVID-19 pandemic have been difficult to fact-check because ‘compensation’ covers so much outside of the realm of regular folks’ understanding,” Agata Pelka, a former employee at several nonprofits, told Hyperallergic.
“The illusion of transparency on 990s is frustrating because their disclosure is supposed to allow the public to hold nonprofits accountable for the tax break they receive and is the only tool employees have to hold leadership accountable for vague promises made regarding leadership compensation,” Pelka added.
For some employees who faced layoffs, furloughs, pay cuts, and an increased workload during the pandemic, it doesn’t matter much how institutions slice and dice the numbers — wealth concentration at the top is jarring, regardless of whether the money is paid out now or later, or considered base salary or something else.
“When Armstrong and other members of leadership spent so much time telling us we’re all in this together, everyone is taking a bit of a hit for the good of the museum, and then he’s padding his pockets, even if it’s with deferred payments, it points to a big problem,” said a member of A Better Guggenheim. “If a mid-level employee took a $5k pay cut, they wouldn’t be receiving that $5k back in the future.”
Last year, after the Guggenheim announced the 25% reductions, A Better Guggenheim suggested that Armstrong take a larger pay cut “instead of continuing to target the museum’s most vulnerable staff.”
Amid market uncertainty as COVID-19 spread worldwide last year, many museums projected deep losses in their endowments, funds that yield investment income. Armstrong and other institutional leaders cited an endowment decline among other financial deficits, such as the loss of admissions revenue, when explaining the decision to let go of staff.
But the Guggenheim’s 990 reveals another perhaps surprising finding: the museum’s year-end endowment balance rose substantially, from $102,669,105 in 2019 to $130,634,540 in 2020. Net investment earnings totaled $18.6 million, up from $10.9 the previous year. The climb may reflect the stock market’s astonishing performance during a year in which millions fell into poverty.
The Guggenheim also received a $5,938,000 loan from the federal government’s Payment Protection Program (PPP), which may be the highest loan amount received by an art museum in New York City (closely followed by the Whitney Museum of American Art, which received a $5,592,822 PPP loan, as reported by ProPublica.) For context, the Guggenheim’s operating expenses in 2020 totaled $53.3 million, according to the museum’s audited financial statements.
The Guggenheim Union, which represents 22 full-time employees and 145 on-call staff at the museum, hopes any gains made in the last year — and leaders’ rising compensation — mean better outcomes for all workers.
“We spent months during negotiations with management listening to them complain that the institution was destitute,” the union told Hyperallergic. “That has obviously changed and we are really excited for our next negotiation over wages and benefits.”
Editor’s note 12/20/21: A previous version of this article cited the Guggenheim Museum’s annual operating budget as $60 million, per a 2020 interview with Director Richard Armstrong. The article has been updated to include total operating expenses from the museum’s most recent audited financial statements.
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