The ABA town meeting and annual meeting on Friday were marked by tense
and heartfelt comments and proposals about association dues, executive
salaries and transparency of information. Near the end of the
discussion, which ran on and off through both events, Miriam Sontz, CEO
of Powell's Books in Portland, Ore., provided what many considered the
best perspective on the controversy, saying that sometimes feedback and
criticism arrives in forms that would not be described as "good
packages. It's our job to go past the bad wrapping," she said, and
understand that some of the members were making "an eminently
reasonable request for more transparency." Speaking to the board, she
said, "I earnestly request you to look at this issue."
The contretemps began when Susan Novotny of the Book House of
Stuyvesant Plaza in Albany, N.Y., said that Cody's Books owner Andy
Ross, who just announced the closing of his flagship store in Berkeley,
Calif., was not coming to the meeting because he couldn't afford his
dues. Saying that she "historically has been a cheerleader for ABA and
still am," in an effort to reduce costs, she had found alternatives to
some ABA and Book Sense benefits that were cheaper and more effective (such as
changing shippers). Novotny stated that the board "needs to apply
ABACUS fundamentals to its own books" and suggested a "moratorium on
dues for everyone."
For her part, Betsy Burton of the King's English, Salt Lake City, Utah,
praised the ABA and Book Sense, saying, "I feel like they've saved my
life and my store. Half the people in this room wouldn't be here
without Book Sense. I'm so grateful for what has been done by the staff and board. I
want to applaud ABA and thank them."
Elaine Petrocelli, co-owner of Book Passage, with stores in Corte
Madera and San Francisco, Calif., thanked the board for its support
during the store's recent struggle concerning the arrival nearby of a
Barnes & Noble and for a trip by COO Oren Teicher to an important
town meeting in Corte Madera, but added, "I need to say that for us,
too, it was very hard to pay our ABA dues. It took a lot to write that
check." She then listed and questioned the salaries and benefits of CEO
Avin Domnitz, Teicher and CFO Eleanor Chang, which combined amounted to
at least $1.5 million a year. She said that few booksellers didn't work as
hard as them and it "hurts that there's such a huge disparity" between
the compensation of top association executives and most booksellers.
In response, incoming president Russ Lawrence of Chapter One Bookstore,
Hamilton, Mont., said that some of Petrocelli's figures were
inaccurate. For example, he stated, Domnitz's annual salary under his
current contract is $375,000 and any other salary is deferred
compensation from a previous contract. The information is available at
Guidestar.org, he continued.
Lawrence went on to praise Domnitz, who, he said, "brings an amazing
skill set to this job," among them his legal and financial abilities.
"Running a trade association headquartered in New York is a very
different job from anything we do," he continued, and Domnitz's salary
is "within guidelines for an association in New York." Moreover, "our
dues are within the norms for an organization like ours" and may be on
the low end while management expenses are "at or below norms."
In reaction, Petrocelli suggested that such standards might be different for a booksellers association.
Former ABA president Ann Christophersen of Women & Children First,
Chicago, Ill., noted during her term, the board "negotiated the most
recent contract with Avin," which she described as a "painstaking,
meticulous, well-reasoned, carefully thought out undertaking." The
board, she continued, "wanted him to lead the organization and its
amazing staff" and wanted to do this "at a reasonable cost." She noted
that Domnitz made concessions in contract negotiations.
While she initially had "sticker shock when I got on the board and
learned about salaries for Avin and his predecessor," Bernie Rath,
Christophersen said, "I learned what a hard job it is to run a national
organization. I'm in the camp that says this man is remarkable." She
added that without ABA and Book Sense, "I think we wouldn't have a
store either."
Another former ABA president, Chuck Robinson of Village Books,
Bellingham, Wash., pointed out that it is important for the ABA "to
have a strong leader--someone who can sit with others" in other parts
of the business and other businesses.
Liz Houghton, owner of Big Hat Books, Indianapolis, Ind., said she
could not have opened her 17-month old store without ABA. For example,
with help from the association, she was able to make a presentation to
her bank, and "in one very long morning, I got my loan." With a smile,
she noted that "I made $350,000 once, and I made $35,000 last year."
But she wanted "all to be in line between what I believe and what I do
all day, and I do that in my bookstore." She continued, "I know we're
all overworked and underpaid, but there are big penthouses in the
future for us."
Then yet another former ABA president, Ed Morrow of the Northshire
Bookstore, Manchester Center, Vt., recalled that "we all gulped when we
saw what Bernie [Rath] was asking for," but Domnitz's predecessor
bolstered his case with statistics from the American Society of
Association
Executives. Particularly because Rath was "entrepreneurial," Morrow
supported his compensation package. Now he believes, he said, that ABA executive compensation is
"egregiously out of whack"--as much as "two-thirds out of whack."
As the town meeting drew to a close, Lawrence noted that in the past
six to eight years, the ABA has "developed great momentum in
independent bookselling," particularly from legal actions and education
and helped keep market share stable for three years.
For his part, outgoing president Mitchell Kaplan of Books & Books,
Coral Gables, Fla., said that the compensation committee "proudly put
Domnitz's contract to the board, and the board proudly ratified that
because we wanted this leader."
At the annual meeting, which immediately followed the town meeting,
Kaplan continued to praise the three top executives of the association,
saying, "from where I sit, you're worth every nickel we pay you. The
costs of having others do what you do would be way more expensive." He
added that "with this association behind us, none of us are going to go
quietly into the night."
During his official report, Domnitz noted, among other things, that
members for several years have wanted the association to make education
its highest priority and that the Winter Institute had fulfilled this
need. "We have never had a reaction like it to anything we've
done," he said. The ABA set up the Winter Institute to be highly
affordable to members, with no fees, low hotel rates and in a place
that offered many low fares.
Domnitz concluded by saying that "I don't know if we're paid the right or
wrong amount of money, but I know 42 people come to work every day and
work 14 to 16 hours a day every day." That staff helps to make sure
that "the world will be a little safer, the world will be a little
easier and the world will be a little better place for independents to do
the most important thing in the world--disseminate ideas through books.
Hopefully we are a support for that." He went on to say that the
staff puts out "a work product five times their number" and will
continue doing so because they think that "everything you do every day
is important and they know how hard it is." He added, "I promise that
for as long as I'm CEO, every member will deliver the best products and
services they are humanly able to do."
In the new business part of the agenda, Ed Morrow complained about a
lack of financial information and transparency and "serious gaps" in
information. He also stated that there is "no effective monitoring of
investments," said audits should be independent and that the sale of
the Tarrytown property last year is "barely visible in the financials."
Also he wondered about the 10-year contract ABA had signed in 1996 to
be a sponsor of BookExpo America, which would be ending this year.
Mitchell Kaplan responded by saying that many of Morrow's assertions
were wrong, in part because some things had changed since the ABA's new
strategic plan had been put into effect and other practices had changed
since Morrow had been on the board. Among Kaplan's points: that three
years ago, the 10-year contract with BEA had been renewed for 10 more
years; that the board hires an independent auditor; that the association has had an investment policy for
years, which is reviewed at every board meeting.
Morrow added that he took the step of a public discussion of these
issues because he had tried to get information from the board since
last fall and felt frustrated. Kaplan responded that the board had
provided every bit of information Morrow had asked for. He asked what
Morrow hadn't received; Morrow said the details were in a report he had
made, at which point he distributed copies of the report to each of the board
members.
Bill Petrocelli of Book Passage then commented that it is "very
important to have transparency with executive salaries no matter how
difficult and embarrassing it can be. Whether they're technically
available, information about the salaries wasn't really available,"
leading to "rumors and inaccuracies." The board, he continued, needs to
"look at other nonprofits" to compare salaries and stated that the
board had never recruited executives from other industries, making
comparisons to those in other fields less relevant.
"I really do think the nature and economic health of members is
important" in determining executive compensation, Petrocelli added. "We
need to feel we are all in this together." Petrocelli recalled that
while working as an attorney 20 years ago for the Northern California
Booksellers Association in its suit against Avon, he debated whether to
charge a regular rate or a rate that "made me feel good with people who
were my friends"--he chose the latter course. In the same vein, he said, "We
should all feel good about what we do." He added that in examining at
the issue of executive compensation, the board should "put behind any
ill will" about past pay and "look to the future."
Kaplan ended the meeting by stating that "we have literally zero to
hide. We're all booksellers, working our tails off and no one deserves
questions of motive. We are all hardworking, well meaning and
controlled by no one but our consciences. Please approach us that way."
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