Where Everyone Is Above Average, Part 1

[Editor's Note 1: this piece has been updated from its original version to include a response from MPR.  See below.  It has also been updated from the original version to improve readability.]

[Editor's Note 2:  FOX 9 News covered this story on their magazine show The Reporters.  Watch this piece beginning at the 9:33 mark.]

A $1 million-a-year pension?  Not even many one percenters can dream about retiring on an income of $1 million per year.

Rarer still is the former non-profit executive who can pull down a million a year in his golden years.

The former head of Minnesota Public Radio (MPR), Bill Kling, it appears, was doing just that.  Bill Kling practically invented public radio, founding MPR back in the 1960’s, and either founded or was there at the start for all of public broadcasting’s key institutions.

Kling, now 72, retired from MPR at the end of June 2011.  However, his income from that taxpayer-funded organization actually went up for two years after leaving the helm.

According to tax documents filed by MPR and its parent non-profit company American Public Media Group (AMPG), Kling received compensation of $1,086,351 in the twelve months ending June 30, 2013 (the most recent data available).

In the 2013 fiscal year, Kling received direct compensation[1] of $370,049.  Kling’s consulting company GreenIsland Group, received[2] an additional $716,302 from MPR.  As described in the footnotes to MPR’s IRS Form 990 tax return,

Beginning on July 1, 2011, Mr. Kling began to perform services for AMPG, MPR’s not-for-profit parent support organization, in accordance with the terms of the employment agreement that called for a post-employment consulting period, which ends December 31, 2013.

Here is a summary of Kling’s MPR compensation the last three years.

Year Ending	Direct	Other	GreenIsland
30-Jun	Comp	Comp	Consulting	Total
2013	370,049		716,302	1,086,351
2012	521,041	20,142	238,842	780,025
2011	644,872	38,913		683,785
Total				$ 2,550,161

As you can see above, Fiscal Year 2011 was Kling’s last year on the MPR payroll.  His first two years in retirement have seen his compensation rise considerably above his previous level.

In addition, Kling received another interesting perk.  Buried in AMPG’s tax documents is this nugget,[3]

Travel for companions upon the retirement of William Kling, the founder of AMPG and MPR, and their president until June 30, 2011, the organization reimbursed Mr. Kling for airfare for him and his spouse for travel related to a retirement vacation.  (See update below.)

I’m not the first to raise questions about the size of Kling's compensation, or notice the link between his compensation and taxpayer subsidies for MPR’s programming, or document the Byzantine interplay between MPR/Kling’s various not-for-profit and for-profit ventures.

On the outrage scale, Kling’s GreenIsland gig can’t hold a candle to the $2.6 million Kling pocketed from the 1998 sale of the for-profit MPR subsidiary River Town Trading catalog company. 

Still, one wonders about the scale of Kling’s post-retirement benefits given the scale of the taxpayer contributions to his former organization.

For its part, MPR's 2013 annual report suggests that support from government agencies represents only 8 percent of the entity’s $85 million in annual revenue.

That cuts both ways: MPR could restructure its business model to find a way to live on the other 92 percent of its revenue sources, then they could pay their executives (past and present) whatever they wished, consistent with the non-profit nature of their operation.

Otherwise, MPR has some obligation—in accepting taxpayer money—to be careful with the taxpayer dollar.  And it turns out to be a lot of dollars from state taxpayers.

MPR accepts more than $1 million a year from Minnesota’s Legacy Fund, the dedicated state sales tax passed by referendum in 2008.  Since the creation of the Legacy Fund, MPR has received the following amounts from Minnesota taxpayers,

Fiscal	Legacy
Year	Funds
2015	1,485,000
2014	1,485,000
2013	1,134,535
2012	1,318,000
2011	1,325,000
2010	1,325,000
Total	$8,072,535

Of course, none of those dollars were earmarked for Kling’s golden retirement.  But the generous taxpayer funding of the organization, overall, should raise questions on the appropriate level of executive compensation.  After all, Minnesota’s Governor earns only $120,303.

Doing Well by Doing Good

Consider the example of Apple co-founder Steve Jobs.  Over his career, Jobs is said to have accumulated a fortune of more than $8 billion.  But every transaction between Apple and the consumer was strictly voluntary.  When I was last in the market for a mobile phone, I bought Jobs’ iPhone, but I could have purchased a Samsung or a Nokia or (more importantly) none at all.

When it comes to my support of MPR, as a taxpayer, I have two choices:  pay up or go to jail.  There seems to me something qualitatively different about a private fortune based on voluntary transactions and a private fortune seeded with taxpayer dollars extracted under the implied threat of force.

In the history of our republic there have been many great public institutions founded by soldiers, doctors, scientists, educators, and others.  But I can think of few other examples where a great public institution was built alongside a large personal fortune.

As they say in the news business, a phone call to MPR for comment was not immediately returned.

Updated:  MPR called back and clarified a number of points.  First, Mr. Kling's post-employment contract ended as scheduled on December 31, 2013.  He is no longer being paid by the organization.  He was paid additional money not reflected in the table above.

Those amounts will be disclosed by MPR in their next annual tax return.  Finally, MPR was reimbursed for the vacation travel costs noted above by individual members of the Board of Trustees as a gift to Mr. Kling.

In Part 2, I examine the pay of other MPR executives.  In Part 3, I compare MPR executive pay to that offered by other organizations.

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[1] See MPR’s 2013 IRS Form 990 Income Tax Return, Schedule J, Part II, Line 8.

[2] See MPR’s 2013 IRS Form 990, Schedule L, Part IV, Line 3.

[3] See APMG’s 2013 IRS Form 990 Income Tax Return, Schedule J, Part III, Page 3.