What Didn’t Work: Tongue-Tied at the Top
Through his experience, Small had reaped considerable assets—pensions worth millions of dollars and a mortgage-free, $3.5 million home in Washington, D.C. But he was not willing to work for the same $300,000 salary as his predecessor. Instead, Small negotiated a total compensation package worth more than $530,000, which included a salary of $330,000, an annual housing allowance of $150,000, and an annual payment in lieu of pension of $54,400.
Concerned that this level of compensation would cause adverse publicity, the small group of regents that negotiated Small’s employment contract did not share the details of the contract with the full board and informed the public only of Small’s base salary.
The next year, the same small group of regents increased Small’s base pay by another $150,000 and his pension payment by $25,500, bringing his total cash compensation to just under $700,000. Small justified these increases to the executive committee by saying that they would allow him to adjust the salary structure for other worthy Smithsonian employees.
But salary increases for other top Smithsonian employees were far more modest than Small’s 41 percent raise. The next highest raise for a top executive was 21 percent; 14 executives received raises averaging 10 percent; and 16 received no salary increase. The adjustments for all employees except Small could have been made under the existing salary structure.
By 2002, observers began to express their concerns about Small’s compensation, leadership, and spending. For example, an extensive Washingtonian magazine article titled “Money Man” questioned Small’s management style and lavish spending, including the $14,600 he spent to charter an executive jet for a trip to San Antonio. Still, the regents took no action. Negotiating Small’s compensation was left entirely to the executive committee.
One reason the Smithsonian regents failed to address the growing concerns is that the chancellor (the Smithsonian’s board chair) ran very tight meetings. By tradition, the chief justice of the U.S. Supreme Court serves as Smithsonian board chancellor—a position that then Chief Justice William H. Rehnquist accepted eagerly. Perhaps applying the same techniques that he used in Supreme Court sessions, Rehnquist stipulated that none of the quarterly board meetings run longer than 90 minutes, and he strictly limited discussions. According to former regent Anne d’Harnoncourt, he once told regent Daniel Patrick Moynihan: “Senator, you may address the board only when recognized by the chancellor. When you are so recognized, your comments will be pertinent, non redundant, and brief.”