New York Times
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July 4, 2004
The Plight of the White-Tie Worker
By BLAIR TINDALL
HIS summer, the backstage chatter at American orchestras is dominated by one subject: money.
In the musicians' locker rooms, frustration is building as the salaries of orchestra executives and conductors skyrocket, while the players' salaries stagnate. With contracts about to expire at 16 major orchestras, including such powerhouses as the New York Philharmonic, the Chicago Symphony, the Philadelphia Orchestra and the Cleveland Orchestra, the discontent is rising to a slow boil.
"This year's negotiation will probably be the most difficult in a number of years," said Ed Ward, the president of the Chicago local of the American Federation of Musicians. Paralleling trends in corporate pay, salaries for orchestra leaders shot up during the late 1990's. Among the 18 American orchestras with 52-week contracts, at least 7 pay their music directors more than $1 million, and 3 pay their managers more than $700,000.
The New York Philharmonic is at the top. In 2003, the most recent year for which tax documents are available to the public, the orchestra paid its music director, Lorin Maazel, $2.28 million for 14 weeks with the orchestra and an annual tour. Zarin Mehta, then the orchestra's executive director (and now its president) got $600,000 and $150,000 in benefits. (The Philharmonic, like most other orchestras discussed in this article, declined to comment on salaries.)
That would be a lot in any case, but it's especially striking at a time when classical music finds itself on the ropes. For big American orchestras, audiences are declining, government and private donations have dropped and recording activity has virtually disappeared. Some argue that the surest way out of this apparent crisis is to hire the best executives and conductors, no matter their price. Others say that these high salaries are an unbearable financial burden — and that they reinforce classical music's image as an elitist, exclusionary world that is increasingly out of touch with its listeners.
The situation is striking at other top orchestras as well. According to tax documents from 2002, the most recent year available in these cases, Mark Volpe, the managing director of the Boston Symphony, was making $349,923; Gideon Toeplitz, then the managing director of the Pittsburgh Symphony, $335,984; Henry Fogel, then the president of the Chicago Symphony, $330,000; and Brent Assink, the executive director of the San Francisco Symphony, $322,688.
Meanwhile, over the last decade, as pay increases for symphony leaders have soared, the players' annual raises dropped from 3.9 percent in 1993 to 1.7 percent in 2003, according to the International Conference of Symphony Orchestra Musicians.
Speaking anonymously for fear of reprisals, many musicians say they are tired of being asked to absorb their orchestras' financial woes while executives use those troubles to exact even higher salaries. "If management starts pleading poverty in this year's negotiations, it would be very tacky," said a New York Philharmonic string player.
Between 1997 and 2002, the compensation of Thomas W. Morris, then the executive director of the Cleveland Orchestra, jumped 92 percent, while the musicians received a 19 percent raise for the same period. And Allison Vulgamore, the president of the Atlanta Symphony, won a 64 percent raise between 1999 and 2002, while salaries for Atlanta's players increased 11 percent.
Ms. Vulgamore had taken pay freezes during 4 of her 11 years with the orchestra, which has become much healthier financially since her arrival. And Mr. Fogel, now the president of the American Symphony Orchestra League, points out that there may be other unseen reasons for a sharp raise, such as moving allowances, bonuses or parity with other orchestras.
In any case, players are being asked to make concessions. At several orchestras, managements have proposed pay freezes or cuts, according to union officials.
"It's the pattern in every industry, that executive compensation has grown over 30 years, while workers' pay stayed flat for the same period," said Robert Frank, a professor of management at Cornell University and the author of "The Winner-Take-All Society."
But the similarity ends there. In the corporate world, the incentive to trim labor costs is to return greater profits to investors. The classical music business is nonprofit, which means that the investors aren't looking for financial rewards. They may, however, re-examine the amounts they're asked to donate to an institution that pays its top people lavishly while simultaneously crying poverty, posting deficits and urging fund-raising campaigns. And like donors, musicians are scrutinizing the salaries as well.
The Conductors
"Executive directors of orchestras are going to have a difficult time in developing and maintaining a bond with players as ratios between their compensation and the players' continue to diverge," said James Abruzzo, a nonprofit consultant with the executive search and consulting firm DHR. When the bond is sufficiently damaged, the players may simply leave, as 14 did after the Houston Symphony imposed a wage freeze in 2003.
Top conductors are also moving around a lot these days, albeit under very different circumstances. James Levine, for one, combines two music directorships, at the Metropolitan Opera and the Boston Symphony. Many who maintain contracts with more than one orchestra earn hefty salaries abroad while collecting six or seven figures at their American posts.
Some orchestras even celebrate their peripatetic conductors' popularity with other employers. The Dallas Symphony tracks its maestro on a Web page, "Where in the World is Andrew Litton?" That's because the hope is that the higher a conductor's profile, the more effective he'll be at fund-raising, a function on which orchestra boards are increasingly reliant.
Mr. Maazel at the New York Philharmonic, for example, is renowned not only for his musicianship but also for his ability to attract donations. His personal Web site trumpets the millions he has generated for charitable organizations through benefit performances. Last season, he challenged contributors to match his own $100,000 donation to the Philharmonic.
But Daniel Barenboim, the conductor of the Chicago Symphony (who collects a second salary from the orchestra of the Berlin State Opera), has announced that he will resign from his $2.14 million American position, citing frustration with just such nonmusical obligations.
The Executives
Salaries offered to star performers and managers often represent an emotional response of boards, said Mr. Abruzzo, the consultant. As donors weary of chronic shortfalls, boards bank on conductors and executives with proven track records rather than untested newcomers. The talent pool is small, and executives bearing responsibility for multimillion-dollar budgets can compete in the for-profit world, which pays significantly more.
Deborah Borda, the executive director of the Los Angeles Philharmonic, says she once considered moving to a for-profit corporation, but, a trained violist, she decided to stay in music. She received $739,000 in 2002 but says she earned it. "I think the orchestra knows I live this job," she said, "seven days a week, 365 days a year."
In 1999, the Los Angeles Philharmonic faced a $7 million deficit, the sudden departure of its executive and the looming construction of the $274 million Disney Hall. Lured from her $420,000 New York Philharmonic post with a $728,000 package, Ms. Borda vanquished the Los Angeles Philharmonic's debt and guided the orchestra's renaissance as Disney Hall opened to universal acclaim in 2003.
The Players
Many musicians approve of high executive salaries — if, that is, the orchestra is doing well. But when it is not, frustration arises, as it also does over inequities in players' pay scale.
These days, for example, many players earn little more than their orchestra's minimum, with increases after five years of service. But principal players make substantially more.
The base pay of a New York Philharmonic musician is now $103,000. According to 2003 tax records, Glenn Dicterow, the New York Philharmonic concertmaster, was making $366,000; Carter Brey, the principal cellist, $255,000; Philip Smith, the principal trumpeter, $243,000; Philip Myers, the principal hornist, $227,000; and Cynthia Phelps, the principal violist, $216,000. The have-nots in this scheme are primarily section string players, who have to pay for instruments costing significantly more than woodwinds or brasses — often in five or six figures.
And in the case of brand-name soloists, the disparity is even more enormous. The violinist Itzhak Perlman and the cellist Yo-Yo Ma, two of the most reliable box-office draws in the field, are reliably said to make from $65,000 to $70,000 per night; as much as full-time players at second-tier orchestras like the Dallas Symphony, the Atlanta Symphony and the St. Louis Symphony make in a year.
That takes a toll on morale, and on collective bargaining power. And even those musicians who consider themselves decently paid often resent subsidizing top conductors' limousines, country houses and jet-set careers.
Compensation for orchestral musicians was less generous 50 years ago, when American orchestras played part-time, and players were often underpaid and poorly treated. In the 1960's, an era of relative affluence produced year-round contracts and performing arts complexes like Lincoln Center.
Politicians lauded the arts boom as a cold war victory, and a cultural shopping spree ensued. In an escalating cycle, orchestra staff positions multiplied; with marketing pros toiling to fill seats at the extra concerts, development offices were expanded to pay for it all. Overspending, a few midsize orchestras folded, igniting a media uproar over the "death of classical music." Almost without exception, they rose from the ashes only to generate new deficits and a fresh crop of newspaper articles.
But the players' gains may have reached a plateau. In the 20 orchestra negotiations that took place during the last year, only one did not involve a pay concession. Now musicians fear that the next round of cuts will involve the number of weeks they have off, the ratio of tenured to part-time chairs and, eventually, the size of the orchestra itself.
Other issues include health care and pensions. At the New York Philharmonic, the players' retirement account is underfinanced by about $9 million, a shortfall that has to be made up partly from the orchestra's endowment.
The Accounting
Though the multimillion-dollar budgets of orchestras may now resemble those of corporations, orchestras are still nonprofit organizations. An orchestra justifies its tax-exempt status like any public hospital, museum or food bank, as an organization receiving support from the government and the general public. But experts say orchestras don't always live within their limits.
"Arts organizations tend to see themselves as separate from the rest of the world, that their giving streams and compensation packages bear no relationship to the rest of the nonprofit sector," said Paul C. Light, a professor of public service at New York University. "But that's absolutely wrong. Orchestras don't get a special pass."
In May, the I.R.S. announced plans to investigate nonprofit salaries exceeding $1 million, after New York State sued Richard A. Grasso, the former chairman of the New York Stock Exchange, over his $200 million retirement package. Under 2002 I.R.S. regulations, nonprofit executive salaries must compare to those at similar tax-exempt institutions. And in 2003, the average pay for chief executives of nonprofit organizations with budgets of more than $50 million was only $188,000, according to The Nonprofit Times.
With tax investigations, disgruntled musicians and recurring deficits, the orchestra business may be forced to re-examine its strategies. Mr. Abruzzo, who teaches arts management in Berlin, sees the orchestra world shrinking both here and abroad. Gone are the days when cities regarded professional orchestra, ballet and opera companies as essential to their cultural life. Instead, many cities are expanding the definition of culture to include zoos, aquariums and science centers and, more significant, arenas, convention centers and stadiums.
The crisis the orchestra may be facing is primarily an internal one: not a loss of value in the wider world, but a malaise borne of chronic overspending and outdated vision. In response, some orchestras have lately developed new community programs or joined with other local performing groups to pool resources.
Joseph H. Kluger, the president of the Philadelphia Orchestra, has pledged $23,800 of his $283,000 salary to the institution's annual endowment drive; the board increased contributions, cut staff and received 10 percent fee give-backs from Christoph Eschenbach, the music director, and some soloists.
"I personally would be uncomfortable making a salary over 1 percent of the budget," Mr. Kluger said, stressing that he spoke only for his organization.
But Philadelphia's strategy may signal a trend. Many orchestras have begun enacting staff salary freezes and cuts during the last three years, as well as encouraging substantial salary give-backs from conductors and executives. They include the Dallas Symphony, the Cleveland Orchestra and the Atlanta Symphony, where Ms. Vulgamore gave back 15 percent of her salary. And at the New York Philharmonic, Mr. Mehta has pledged $100,000 to the organization over three years.
Ms. Borda took a different tack, reinvesting the Los Angeles Philharmonic's profit into a new system of education, outreach and commissions.
And the midsize Utah Symphony, with a budget of $17 million, is testing new ground. It merged with the Utah Opera last year, saving $1.5 million by streamlining administration and scheduling for guest artists. Anne Ewers, the executive director, and Keith Lockhart, the music director, have each pledged $10,000 in challenge grants.
Ms. Ewers, who earns $175,000, said, "I'd rather see the organization thrive than demand a huge salary."