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Monday, February 22, 2010

Salary Flap More of the Same

I personally think it's wrong that NYRA was pressured by politicians (egged on by the press) into releasing the salaries of its executives. Another obvious case of Albany attempting to divert the attention away from its own dysfunction and on to the usual whipping boy. Besides, NYRA is a private corporation which generates revenue for the state, and is not, in the normal course of normal operations, supported by taxpayers. The question of whether the monies which accompanied the franchise agreement was a taxpayer-supported bailout or a token compensation for land valued at far more is a matter of debate and perspective. But the looming state rescue which will no doubt be widely portrayed as a "bailout" is anything but. It's merely money which NYRA is due.

As far as the salaries themselves go, I'm no expert on corporate compensation, so the following are just my untrained personal impressions. Charlie Hayward is the chief executive officer of what many still consider to be the top racing operation in the country. What do those who are grumbling about his salary expect him to make? Especially with all the crap he's put up with, and compared to the other executives cited by NYRA, his pay seems totally reasonable.

I have no idea what the hell Hal Handel does, so I have no opinion on his pay. If his position is supposed to be comparable to that of Bill Nader, then Handel certainly keeps a lower profile than his predecessor. Then there are the lower level executives listed; and honestly, I'd have to say that they do seem be to quite fairly compensated.

However, even if you cut all of their pay in half, the difference just wouldn't be material in the larger scheme of things, considering the millions in racino money that is supposed to be flowing from a racino now, the absence of which is no fault of NYRA's at all. But still, we have Gary Pretlow, who, as the chairman of the Assembly's Racing and Wagering Committee, is (presumably) quite well aware of exactly why NYRA is in the situation it's in, offering this programmed political response: "They're running an unprofitable business making exorbitant salaries." Actually, they're attempting to keep the racing going despite a business model rendered unsustainable by years of government neglect; and the Chairman knows that very well.


Anonymous said...

I'm tired of hearing that NYRA's debt is the result of its business model and political interference. For years the state has mandated that a percentage of takeout go for purses, as it should be. As all source handle has declined significantly for years, it should be quite obvious that purses did not follow suit, declining proportionately; thus NYRA's management 'borrowing' funds from the horsemen's purse account, not paying on the loan from the CIF, not paying taxes, pension obligations, etc., to maintain purses at a high level while all management salaries increased also.

Just what are the tough decisions required of management to warrant$460,000 salaries? Just what skills are required to maintain a racetrack, write a condition book, and open the doors everyday? NYRA doesn't manufacture anything, doesn't have an inventory, work-in-process, need to train a sales force, distribute a product, design new products. It even has a defined territory free of encroachment.

NYRA hasn't been profitable for years because they maintained purses at a level that was not sup-ported by takeout and signal fees to, supposedly, maintain the image that they provide the best racing in the country; that the 'good ole boys' club', with 26 or so directors is allowed to benefit from slot revenue is simply disgusting; that it is management's intention once slot revenue is flowing to spend $100 million to renovate Saratoga is appalling, as is their plan to double purse amounts, and no doubt their salaries.

Anonymous said...

Alan, thanks for bringing some much needed perspective to the on going NY racing franchise issue. Let's just hope and pray that the legislature doesn't use the Aqueduct VLT fiasco as a handy excuse to put NYRA out of business. As you know, Saratoga County development honchos recently reminded a Senate committee that it is the state in default of the racino revenue sharing agreement, not NYRA. Say, and how 'bout Team USA beating the Canadians?! No, let's not think 1980 just yet, it's bad luck. /S/greenmtnpunter

Teresa said...

"Just what are the tough decisions required of management to warrant$460,000 salaries? Just what skills are required to maintain a racetrack, write a condition book, and open the doors everyday? NYRA doesn't manufacture anything, doesn't have an inventory, work-in-process, need to train a sales force, distribute a product, design new products."

This statement defies credulity. NYRA oversees a workforce of hundreds, possibly thousands; acres and acres of land at three locations; has contracts with a variety of vendors and unons; does in fact need to design new products and market them (mobile wagering, for instance), etc.

I have no idea what company presidents make elsewhere, but to suggest that the job is an easy one is beyond reductive.

Anonymous said...

Teresa, you left out what takes up most of Charlie's time right now, dealing with the daily assault by the politicians and the media.

Whatever you think of the mid-manager level salaries (they do appear on the high side, but not outrageous), the top execs at NYRA are compensated at levels way below their comparable positions at other racetracks.

Anon 546's continued inference (for months now) that somehow NYRA is robbing the bottom line by paying out TOO MUCH in purses pretty much disqualies any of his/her comments as being uninformed.

The Horseman's Groups would beg to differ.

jk said...

Pretlow should add up the salaries of all of the Regional OTB Chairmen. No doubt it is much greater than 460k. If he is serious about cutting costs and waste, that is the starting point.

Anonymous said...

I often thought that the Horsemen's Groups were out of touch with their "we put on the show" mentality as if they should be on top of the pecking list when it comes to who gets what. They should get a % of what they help generate. To suck money out of the local economy with slots to give them the purses they think they deserve really is wierd. What are they doing racing in the middle of winter when nobody cares?
Come up with a better plan or fold.

El Angelo said...

Given the amount of aid, assistance and support that NYRA has gotten from the government in recent years, I have no problem with them having to disclose their salaries. In fact, this probably would have had to been disclosed as part of their bankruptcy petition/papers.

I also think there's nothing wrong with what any of the executives make, their compensation seems quite fair for running a fairly large enterprise. I don't think they're doing a great job, but that's a whole different story.

Teresa said...

And there's also that whole "try to get the millions that NYC OTB owes us" task that the NYRA guys are probably working on, too. There's a hearing today that's scheduled to last six hours.

Anonymous said...

jk, yes, a list of six figure wage earners at each of the regional OTB's would be very interesting.

I guarantee you there are a lot more of them earning more than the top execs at NYRA and putting in a lot fewer hours.

You will never see that information disclosed because it would be very embarrassing to politicians.

Although I guess NYCOTB's wage info might be in the bankruptcy petition?

Anonymous said...

NYRA's total salaries are 61.2 million.NYRA's top six officers salaries are 2.18 million.NYRA has claimed that their exec. salaries are below the industry standard. NYRA has not paid NY State a franchise fee since 2003.If you do a good job you get a raise Charlie!

El Angelo said...

Bob Evans, the head of Churchill Downs, makes $450k a year in salary, plus other perks. Heyward isn't far off from the norm.

Steve Zorn said...

Where to start --

What are we doing racing in the middle of the winter when nobody cares? We're actually generating a profit for NYRA. Belmont loses money (because of the high stakes purses). Saratoga and the AQU winter meet make money -- the latter because of the abysmally low level of overnight purses.

The NYRA salary level is indeed below that at Churchill and Penn National, but those have slots at some of their tracks and/or adw operations, and are privately owned. NYRA really is a state agency at this point, and some moderation should be expected.

I don't know what Hal Handel does, either. I do have some idea of what Pat Kehoe does, though, and he might want to be looking in the rearview mirror for all those highly qualified BigLaw lawyers who've recently been laid off. Trust me, they'll work for less.

And, yes, NYRA is working on the OTB issue, and proposing a sensible plan to take over NYC OTB.

SaratogaSpa said...

If you would have asked me to guess the over/under for Charlie's Salary I would say $500,000. It came as a win for the "under". Whatever you may think of NYRA , the salary seems fair and no bitching about it from this end.

alan said...

Can't imagine that this can be too good for morale at NYRA....which couldn't have been so great to start with.

Anonymous said...

This whole debate is ridiculous and only serves to take our eye off the ball, just as the pols want us to do. Cast the blame on NYRA and uninformed fans take the bait every time.

"Boob Bait for the Bubbas", as Sen Daniel Patrick Moynihan so memorably put it. The state is in default of the agreement made with NYRA wherein they guaranteed Aqueduct VLT revenues would flow long before now. It's the only way the business model works.

These are the same people who have driven NY State to the brink of bankruptcy and who also say they can more cost effectively run our health care system on a nantional scale. You can't be serious?!

Government regulation put the NY racing industry in a straitjacket many years ago and this is the end result. Name one enterprise, just one enterprise that the federal or state government hasn't screwed up by it's mere presence. /S/greenmtnpunter

El Angelo said...

(1) Social Security.

(2) Medicare.

Anonymous said...

Copied from three threads back, these are 2008 compensation for CD execs, including bonuses and stock options;

Charlie is underpaid by these standards.

Mr. Robert L. Evans , 57
Chief Exec. Officer, Pres $ 904k

Mr. William E. Mudd , 39
Chief Financial Officer, Principal Accounting Officer $ 506k

Mr. William C. Carstanjen , 42
Chief Operating Officer and Sr. VP $ 622K

Mr. Steve Sexton , 50
Exec. VP of Racing Operations and Pres of Churchill Entertainment Group $ 423k $ 0

alan said...

Since Churchill Downs is a public company, I imagine that Mr. Evans and the other execustives have some kind of stock compensation in addition to their salary.

Anonymous said...

National Park Service

Anonymous said...

Social Security has been broke for years but it will be just fine, just you wait and see. Medicare will be fixed forever just as soon as we enact our government health care scheme. How do we know? Because the pols told us so. National Park Service is a great success. How do we know? Well, Ken Burns' latest, over-the-top apologia promoted by PBS told us so. And NYRA is to blame for the abominable condition of NY racing because the pols told us so.

El Angelo said...

When people like the Senate Majority Leader get thrown in jail for being crooks, you're right, it's tough to trust pols.

Anonymous said...

Joe Bruno took the fall for the rest of the Albany crowd. They must be shaking in their boots thinking "we could be next". Joe Bruno was no more guilty than the rest of the lot that inhabits Albany.

In fact, I would argue that Joe Bruno was a more honorable and dedicated public servant than most others in that cesspool. Joe Bruno was targeted by El-yut from Day 1 and El-yut's pals the feds managed to railroad a conviction.

This one will be reversed on appeal. I also recall there is a SCOTUS case pending in review of the federal statute used to convict Joe. Never count ol' boxer Joe out, he's still a winner. /S/greenmtnpunter


Anonymous said...

Joe Bruno did a mountain of work for up state and for thoroughbred racing and steered many bailouts for NYRA over many years. He like all people has his faults and so his good deeds should be remembered and acknowledged. I bet Joe is regretting ever meeting Jared Abbruzzeze who seems to have gotten off scott free while the schemes he concocted resulted in the the two counts that convicted Bruno.

Anonymous said...

Zorn: I've been watching Kehoe operate since he was in the governor's office handling racing. You think NYRA is going to replace him with a wash-out from a "big" law firm who know nothing about the racing law or racing politics for the money? I'm sure Delaware North or Tioga would happily top his NYRA salary, no questions asked! NYRA cannot afford to have him working for anyone else in NY racing - he knows too much, and he knows how to use it. It'll be interesting to see how NYRA's salary revelations pan out. If they lose Kehoe, it will be their final undoing.

Anonymous said...

In all the salary ruckus, no one mentioned the highest paid NYRA 'employee': Neil Getnick, at $125,000 per month.

Exactly what is he doing to earn his money? His biggest recommendation, the detention barns, appears to be on its way out ...

Eddie D. said...

These statements that Bob Evans from CDI only makes six figures are way, way off. He makes seven figures/year EASY.