New York Times on Museum Directors' Apartments

http://www.futureofcapitalism.com/2010/08/new-york-times-on-museum-directors-apartments

The New York Times has a front-page article focusing on three New York museums who provide their directors with housing whose value is not taxable as income under the theory that the apartments are the site of business-related entertaining.

In addition to her $877,000 compensation package, Ellen V. Futter, president of the American Museum of Natural History, lives rent free in a $5 million East Side apartment that the museum bought when she came aboard.

The Metropolitan Museum of Art houses its director, Thomas P. Campbell, in a $4 million co-op that it owns across Fifth Avenue from the museum.

The director of the Museum of Modern Art, Glenn D. Lowry, may have the best deal of all. In addition to the $2 million in salary and benefits he earned last year, he lives in a $6 million condo in the tower atop the museum.

As we've been pointing out around here, the cultural and attitudinal shift on university campuses toward non-profit or government employment and away from the private, for-profit sector is one of the biggest stories around these days.One factor — not the only factor, but a significant factor — is that non-profit pay and benefits have escalated to a point where executives in that sector can do pretty well for themselves. It'll be interesting to see whether the Times follows up with an editorial, or if Congress or the IRS make a move against this sort of thing. The Times has been thought in certain circles to sometimes go a bit easy on the Met because Arthur Ochs Sulzberger is an emeritus trustee of the Museum. While Ms. Futter was president of Barnard, Mr. Sulzberger and his siblings gave the college a $5 million gift to honor their mother.

Not given in the article is probably the best counterargument to the claim in the Times headline, "Plum Benefit to Plum Cultural Post — Free, Tax-Free Housing," — which is, given the astronomical rise in New York real estate values over the past couple of decades, the museum directors might well be better off financially long term had they bought an apartment rather than occupying one owned by their employer. Ms. Futter, for example, was hired by the Museum of Natural History in 1993. The right Manhattan residential real estate investment made then could have very easily doubled. A greater increase — say, ten-fold — could have been possible. And she could have been taking the home mortgage tax deduction all along.

by Ira Stoll  |  Aug 10, 2010 at 9:17 am Related Topics:  Compensation, Housing, New York, Non-Profits, Press, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list