Hi all,

We’ve heard your questions and want to address them broadly, as well as
provide more information about the breakdown of Sue’s compensation during
this time. We understand the confusion related to this recent 990, given
the period it covers, and the aggregate amounts it reports. Below you’ll
find additional information about the nature of our contract with Sue, the
timeframe, and her work and compensation. I expect this will help resolve
this conversation. As Chair, I am completely comfortable with all terms.
Sue was a great ED and brought real value in exchange for her compensation.

==

Background

In re-reading Jan-Bart’s original email [1] where he stated that Sue was
staying on as an advisor, it isn’t explicit that this was a paid position.
We should have been more clear on this point. It is understandable that
people wonder why Sue was not listed on the page of staff and contractors.
However, everyone listed on the staff and contractors page report up to the
ED. Sue did not report to the ED; she was accountable to the board chair.
That's why she was not on that page.

On the issue of compensation: We handled Sue's compensation the same way we
do with other individuals: it is disclosed in the 990 as appropriate, and
not elsewhere. That's our normal practice. This is true for a variety of
reasons, including the fact that the results are certified through our
external auditors. Other reasons include that it is a transparent
mechanism, consistent with other large charitable organizations, and a
matter of permanent, public record. The Foundation also wouldn’t normally
announce the salary or contract compensation at the time of bringing
someone on; that includes special advisors.

We also don’t usually share the specific details of people’s compensation
beyond what is published in the 990. However, the 990 can be confusing,
especially when compensation levels change mid-year, and so in this case we
(including Sue) are happy to clarify the specifics.

Timeframe

One point of confusion is for the period this compensation covers. This is
reasonable, this confused even some of us involved in preparing this
response. Although the majority of activities reported on the Form 990
cover the Foundation’s fiscal year (specifically, the six months between
July 1, 2014 - June 30, 2015), the IRS requires that details about
compensation for certain highly-paid individuals are for the full calendar
year in which the fiscal year begins or ends. So all the executive
compensation reported is for twelve months, from January - December 2014,
even though some of it it falls outside the fiscal year reporting (July 1,
2014 - June 30, 2015).

Since Sue was on payroll during the 2014 calendar year, this means that the
990 contains her total compensation for the whole year, includes Executive
Director salary, bonus, and special advisor work, at differing levels
throughout that period.

Total compensation

The total compensation ($301,341) reported in the 2014 990 form is broken
into three areas:

(1) Compensation for her role as Executive Director during the 2014
calendar year (January 1 - May 31 2014): $107,174

This number is Sue’s regular compensation as full-time Executive Director,
before the appointment of the new ED. This is for the 2014 calendar year
period of January 1 - May 31, 2014. It does not include compensation for
any of her efforts following May 31, 2014.

(2) Retention bonus to compensate Sue for lost opportunities during the
transition period: $165,000.

Sue informed us of her intent to step down in March of 2013, but agreed to
stay on until a new ED was identified. In August 2013, the Board of
Trustees approved a one-time retention bonus to compensate Sue for lost
opportunities and for her willingness to remain with the Foundation during
an important transitional period. Sue continued to serve as Executive
Director for more than a year after announcing her resignation, even though
she could have sought opportunities elsewhere. In addition to her other ED
responsibilities during this time, she led the creation of a transition
plan for the new Executive Director and supported the search process.

The Board discussed this agreement with Sue over a few months before
reaching the agreement in August. This is a standard practice used to
compensate individuals for lost opportunities and ensure organizational
stability during transitional periods. The Board and Sue agreed she would
receive this retention bonus after the new ED had started.

(3) Compensation as Special Advisor between June 1, 2014 - December 31,
2014: $29,167.

Sue agreed to serve as Special Advisor to the Foundation for a term of one
year after the new ED started, from June 1, 2014 - May 31, 2015. The Board
felt that it was important to have Sue’s knowledge and experience at hand
to support the Foundation as it went through an executive transition. In
general, it is good practice to make sure that there is the ability to draw
on the expertise of an experienced former executive: in this case, someone
who grew the organization from a few people to more than 200.

Sue’s total compensation for her role as Special Advisor was $50,000 per
annum, $29,167 of which was reported during the 990 period. This is a small
proportion of the total amount reported, as compared to compensation as ED
and the retention bonus.

In June of 2015, the Board of Trustees extended Sue's term as Special
Advisor for another year, amounting to an additional $50,000. Her term
ended May 31, 2016. The compensation for this period is unlikely to be
reported in the next 990, as it is much lower than the threshold for
reporting. However, Sue has agreed to disclose this total, given the
interest in her role as Special Advisor.

We realize this is complex, so to summarize: From January 1 2014 to May 31
2014 Sue was the ED and received her normal salary. When Sue left her
position as ED we gave her a one-time bonus of $165,000, to compensate her
for staying on during a long transition period. From June 1 2014 until
December 31 2014 she received $29,167 intended to compensate her for
advising the Board after the new ED started. These are the numbers reported
in the 990. Since then, she received a total of $70,833 for work as a
special advisor over a period of 17 months (January 1 2015 - May 31 2016).

Other questions

As Special Advisor, Sue reported to the Chair of the Board: first Jan-Bart,
then myself. We did not ask Sue to produce a final report on her work as
Special Advisor. Her contract did not require it, and we didn’t see any
reason for her to create one. Sue was in regular contact with the ED,
Chair, and Trustees throughout this period, and we are satisfied that the
terms of the contract were met appropriately.

Questions have also been raised about the number of hours spent by Sue
during this period. The 990 reports that Sue worked 40 hours per week,
which reflects her work while she was Executive Director. Forty hours per
week is the standard, full-time employment threshold in the United States;
most employers do not track the hours of salaried employees beyond these 40
hours. Sue often worked many more than 40 hours per week during her time as
Executive Director. Once Sue transitioned into a consulting role, her hours
varied. She consulted on an as-needed basis, sometimes as little as a few
hours a month, sometimes many more.

==

Sue’s special advisor status with the Foundation ended on May 31, 2016, and
she is no longer on contract with the Foundation or receiving any
compensation from it. However, many of the Trustees and Foundation staff
continue to maintain close personal relationships with Sue. She played a
critical role in developing the Foundation and the movement, and will
always be welcome among us. We thank her again for her time and efforts on
behalf of our mission, and we are grateful for her continued support and
advocacy on our behalf.

We would also like to thank Sue for her willingness to being completely
transparent about her compensation here. Many people find this information
sensitive. We appreciate that she has said she doesn't mind.

I hope this answers more of your questions, and addresses any confusion.

                                         Patricio

[1] https://lists.wikimedia.org/pipermail/wikimedia-l/2014-May/071458.html
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