I kicked a hornet’s nest earlier in the week. I knew that it was not only possible but very likely that someone (maybe even a few people) would have a serious issue with my posting the Appraisal Foundation (TAF) tax paperwork showing their president’s salary, David Bunton, from 2017. I do not begrudge anyone making a salary commensurate with what they are worth in the market. I mean no ill intent to Mr. Bunton whatsoever. In fact, I have spoken to him several times. We have had some great conversations and he has impeccable taste in wine. Nothing untoward was meant at all. I am just asking why things look the way that they do. And when one sees such a salary number, it does makes one stop and wonder about it.
To be clear, I am not saying that his compensation is commensurate with a fair market amount or not. That is for others to determine, I am just an appraiser and I will leave the opinion of what is fair or isn’t fair to the readers out there. The only opinion I have is the way that the standards are handled. In the appraisal profession, that handling seems to be a bit of an unicorn. I am not aware of any profession that requires the practitioners to purchase their standards every two years and also requires said practitioners to pay for continuing education that pays a licensing fee to the owner of the standards because these standards for public trust are copyrighted and fiercely protected.
In the meantime, I have done some additional research and I have been able to piece together a multiple year comparison of what TAF is doing regarding the topic. This is all easily obtainable information, but I have assembled it from the schedule Js from each year available.
I was also able to speak with two CPAs and one non-profit executive management professional and confirmed that the TAF press release that went out today was on point and explained the situation in a reasonable, and more importantly, legal way. TAF is doing nothing wrong, at least from what is required of them under current IRS regulations and applicable tax law.
From the TAF press release January 22, 2020:
“More than a decade ago, the Foundation’s Executive Compensation Committee set up an executive retirement account for Mr. Bunton, a common practice in the nonprofit world. Under the terms of this account and per IRS regulations, a lump sum disbursement was required when the account holder turned 65 years old. For Mr. Bunton, that occurred in 2017. The Foundation’s 2017 990 reflects BOTH Mr. Bunton’s annual compensation and the entire retirement savings from the account, which was a majority of the compensation.”