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Citi Center, Defense Letter

Posted by Geoff Edgers  August 21, 2007 03:00 PM

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The Citi Center has sent this letter to about 15,000 supporters, members, and donors. Here's the full text.

An Open Letter from the Citi Performing Arts Center

As you no doubt are aware, recent media reports have raised questions about the governance and the management of the Citi Performing Arts Center, including compensation matters, the Center’s Free Shakespeare program and its strategic plan for the future. For all of us who care deeply about this great institution, these reports were troubling and, in our view, ignored the Center’s long and successful track record of bringing outstanding theater, dance, and music to the public as well as its historic and ongoing leadership in providing broad-based access to arts education.

As an organization dependent on funding from charitable foundations, government entities and the public at large, we recognize our responsibility to be as transparent and open as possible. In that spirit, we are writing to provide you with additional information about the issues covered in the recent reports and to reassure you – our members and supporters – of our steadfast commitment to offering the highest quality of performing arts and educational programs to the public.

Executive Compensation

The first issue concerned the compensation of our President and Chief Executive Officer, Josiah Spaulding Jr., and the assertion that the Center agreed to pay Joe a stay bonus “not long before” the Center decided to decrease the number of performances of the summer’s Free Shakespeare on the Common program.

In fact, the decision to award Joe a stay bonus was made in 2001. At the time, the Compensation Committee’s goal was to assure that the then Wang Center would be optimally positioned to face significant challenges for an additional five years. The committee recognized not only Joe’s extraordinary performance and leadership during the previous fourteen years but an increasingly competitive environment brought on by several factors: the arrival in Boston of giant for-profit players in the entertainment industry like Clear Channel, the proposed renovation of the 2400 seat Opera House and heavy recruiting from national performing arts centers with CEO vacancies.

Joe’s bonus was paid in July 2006, pursuant to the terms of his 2001 contract, and in recognition of his having fulfilled his commitment to remain at the Center during the entire contract period. Although recognized as a lump sum cash payment of $1.238 million in FY07, the payment reflects a yearly bonus of $200,000 for fiscal years 02 through 06, plus accrued interest. The payment came from accrued reserves.

It is important to note that the fact that Joe’s contract included a stay bonus was not news; the amount of the bonus as well as when it would be paid was reported on by the Boston Globe more than two years ago. Simply put, it was misleading to link the bonus payment, which fulfilled a contractual commitment made six years ago, to recent program decisions in connection with the Center’s annual operating budget.

We also want to underscore that Joe’s annual compensation is comparable to the heads of performing arts centers with gross operating budgets of $25M - $45M. One of the recent press reports inaccurately stated the percentage of the Center’s operating budget that goes to pay Joe’s salary. In reality, Joe’s compensation was less than 2% of the Center’s gross operating budget of $22.9 million in FY 06.

Programming Decisions

Regarding the reduction in Free Shakespeare performances, the Board and senior management team have had to make some difficult but necessary decisions concerning the scale of the Center’s activities. These are challenging times for many performing arts organizations, and we must constantly balance our mission with the need to be fiscally responsible to ensure the Center’s long-term viability.

The Center has invested more than $4 million in Free Shakespeare over the last five years but faces an accumulated loss on production-related expenses during that time of $1.366 million. While our goal was to cut as few performances as possible, this summer’s run reflected a balance involving the total number of performances, the Center’s investment in production values, and the overall artistic vision as reflected by Steven Maler, the founding artistic director of Commonwealth Shakespeare Company. We will continue to evaluate new and different funding sources and possible partnership models that can help us stage Free Shakespeare for years to come and ensure that it remains a vital and key component of our public programming efforts.

Governance

The Center has a detailed conflict-of-interest policy that complies fully with state Attorney General’s guidelines. As part of a governance and reform initiative, the Center’s by-laws and polices were rigorously reviewed this spring by legal counsel from two firms. The Board is responsible for continually reviewing possible conflict issues and addressing them in a timely fashion; it will continue to monitor this with deserving due diligence.

Questions were raised about Board members who at times have provided professional services for the Center, and whose firms have been compensated for this work. This is entirely ethical and hardly unusual. Non-profit organizations and for-profit companies often seek board members who can provide value both in terms of leadership and specific professional expertise. Any work performed by Board members themselves is on a pro bono basis, and any fees charged for work done by their firms represent a standard non-profit discounted rate.

Strategic Plan

We also wanted to share with you the vision of the organization contained in our recently completed strategic plan, which starts with an acknowledgment that all non-profit performing arts organizations must continuously respond to changing market conditions and improve their services.

Two years ago, the Board of Trustees of the then Wang Center embarked on a comprehensive strategic planning process to refocus the Center’s programs and operations. The strategic plan envisions collaborations with many other arts and educational organizations, more self-funding programs, and technology upgrades to better serve our customers, among other initiatives.

Transformative change of this scale and scope is not quick or easy; we think it will take five-to-seven years to see the true results of our work. But we believe that with our talented professional team, your patronage and generous support, the investment of corporate leaders like Citigroup, Boston-area foundations and our public officials, and the vision of this strategic plan, Citi Performing Arts Center will prosper as a distinguished leader among Boston’s arts institutions.

As part of our strategic planning, we have been recruiting new trustees while engaging current trustees to provide them with the greater opportunities to contribute to the institution. Additionally, the Wang Theatre occupancy has increased substantially through a new mix of uses that have included education programs, community activities and performances, corporate events and film industry productions.

Our Leadership

We are mindful of our fiduciary responsibility to our donors and our mission to provide access to and promote appreciation of the performing arts. As the people most knowledgeable about the Center’s finances, governance, and management decisions, and as individuals with a great deal of personal investment in this enterprise, we affirm our Board’s respect for and total confidence in the leadership of Joe Spaulding and his new management team. All of us who have had the honor to work with Joe enthusiastically believe in the integrity, energy and drive that characterize his visionary leadership. We have absolutely no doubt that he is the right leader to revitalize the Center at this time.

This institution has many great strengths and there is no question that it will withstand this period of challenge. We deeply appreciate your continued support as we strive to accomplish the goals of our new strategic plan and work to bring the highest quality performing arts and arts education programs to you, our members, supporters and the public.

John William Poduska, Sr.
Chairman of the Board

On behalf of the Citi Performing Arts Center Officers of the Corporation

John Cook – Treasurer
Charley Polachi – Vice Chairman
Robert Sachs - Chair of Governance
Elliot Surkin - Clerk

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About Exhibitionist Geoff Edgers covers arts news for The Boston Globe..
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