When George Washington became the first president of the United States in 1789, he reluctantly accepted an annual salary of $25,000 – a very substantial figure for that time. He didn't like the idea of being paid to serve his new country but was convinced that not taking a salary would set a bad precedent, and in the future would restrict the presidency to independently wealthy individuals. It's not as if Washington was flush with cash; it's said he had to borrow money to move from his home in Mount Vernon to New York City, where the first capital was established.
The presidential salary remained at $25,000 until 1873, when it was doubled to $50,000, jumped to $75,000 in 1909 and to $100,000 in 1949. It remained at that level until 1969, when Congress voted to increase the salary to $200,000. It was doubled again in 2001, to $400,000, where it remains today.
That's a pretty good salary, and the benefits of being president are even better, but $400,000 is an almost immeasurable percentage of the annual U.S. gross domestic product of $17.4 trillion – the economy for which many of us hold the leader of the free world responsible.
The horse racing industry makes up a relatively small percentage of that gross domestic product but is substantial nonetheless. In 2005, when the last extensive economic impact study was performed, the horse industry in the United States directly contributed $39 billion to the economy, with another $102 billion in indirect contributions. There were an estimated 460,000 full-time jobs, with the multiplier of indirect contributions providing for another 1.4 million full-time jobs.
The Paulick Report has examined some of those jobs and their accompanying salaries. Specifically, on several occasions, we have published a survey of annual executive salaries for the major non-profit organizations that serve the horse industry.
This year's survey includes executives from the national organizations many refer to as the “alphabet soups” of the horse industry: AAEP, AHC, AQHA, BCL, NHBPA, NTRA, TJC, THA, TOBA and TRA. The salaries, additional compensation and annual revenue in the accompanying tables are from the most recent IRS Form 990s available online at GuideStar.org.
Not surprisingly, the largest salaries accompany executive positions at organizations like Breeders' Cup, The Jockey Club and the American Quarter Horse Association, which have the highest annual revenue. The top salaries are a small percentage of annual revenue. The AQHA, for example, in 2014 had the highest annual revenue of $47,348,772. Executive vice president Don Treadway is paid $388,418 in salary and benefits, but that represents less than 1 percent of the AQHA's annual revenue.
Breeders' Cup CEO Craig Fravel is the highest-paid non-profit executive in the Thoroughbred industry, with total compensation of $794,458 in 2015. That represents just 2 percent of the organization's total annual revenue.
At the other end of the scale is the Thoroughbred Horsemen's Association, whose $84,000 annual salary for CEO Alan Foreman accounts for 43 percent of the THA's revenue. (Foreman also is paid $139,996 by the New York THA for legal counsel.)
The salaries of Dan Metzger, president of the Thoroughbred Owners' and Breeders' Association (total compensation of $271,209 in 2013) and Chris Scherf, executive vice president of the Thoroughbred Racing Associations of the United States ($264,542 in 2014), represent 30 percent of their respective organization's annual revenue.
This year's published chart does not include the numerous state and local chapters of non-profit horseman's organizations: Horsemen's Benevolent and Protective Association, Thoroughbred Horsemen's Association, Thoroughbred Owners of California, Kentucky Thoroughbred Association, et al. The highest paid active executive among the various divisions is Michael Ballezzi, executive director of the Pennsylvania Thoroughbred Horsemen's Association, with total compensation of $312,916 in 2014, 20 percent of the organization's annual revenue of $1,578,954. The Pennsylvania THA's Form 990 also discloses that $144,809 was paid to the Archer Greiner law firm, of which PTHA president Sal Debunda is a partner. The PTHA also spent $448,618 on promotions, much of that for the “Let's Go Racing” cable television show that was created in partnership by Debunda and lists Ballezzi as “technical advisor.”
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