Don Smiley Paid $3.3 Million in 2022

Don Smiley speaks to the media. Photo taken December 8th, 2016 by Michael Horne.

Even for Don Smiley, the long-time beneficiary of mega salaries, 2022 was a banner year: the Summerfest president collected $3.3 million in compensation.

“Wow. That’s a lot of money,” said Alderman Bob Bauman, in whose district Summerfest is located, in comments to Urban Milwaukee.

All told, Smiley was paid just under $9.9 million for the six years from 2017 through 2022, according to its annual tax forms. Smiley retired at the end of 2023, meaning he has collected one more year of compensation, and based on the growth of his pay over the prior six years, it’s likely to be a multi-million dollar payment.

“That’s a nice payout for someone at a nonprofit,” said Ald. Jonathan Brostoff of the $3.3 million salary.

Yes, Summerfest is a “public charity,” as it has described itself, which is “not organized for profit but operated exclusively for charitable and educational purposes.”

Its tax form shows it received $76.3 million in gifts, grants and contributions in the six years from 2017 through 2022. It is also exempt from federal, state and local taxes, meaning it is subsidized by taxpayers.

A complaint filed with the IRS against Summerfest in 2022 challenged the festival’s nonprofit status, claiming it now operates “as a commercial entity.” Among other things it charged that Smiley was paid a salary like those in the for-profit sector, noting that he “earned $971,000 in 2017, while attendance at Summerfest was 831,769, meaning the equivalent of $1.17 of every ticket went to compensate the organization’s president.”

By that standard Smiley’s 2022 compensation of $3.3 million was far more questionable: With attendance down to just 445,611 in 2022, that meant that $7.40 of every ticket went for Smiley’s pay.

In the past former aldermen Michael Murphy was sharply critical of Smiley’s compensation, “when you compare it to the president of Wisconsin State Fair, which is a similar festival except it has greater attendance, and the director of it earns much less,” Murphy said in 2023.

Smiley’s $3.3 million compensation in 2022 was 23 times more than the annual salary of State Fair director Shari Black, who was paid  $143,821 that year.

That helped keep the admission price for State Fair much lower, at $17 in 2022 versus $25 for Summerfest. Had Smiley earned the same pay as State Fair’s director, the admission price would have been more than $7 lower.

Smiley’s 2022 salary was a major contributor to the nearly $9.3 million deficit Summerfest ran in 2022, with about $68 million in expenses and nearly $59 million in revenue. His pay check accounted for 34% of all salaries and wages paid by Summerfest in 2022.

Smiley was hired in 2004 after a national search by Summerfest that offered $225,000 in pay. He is a Kenosha native who had lived in Florida for 20 years and moved back to Wisconsin to take the job. Yet that salary that was good enough for a national search began to skyrocket once he took over, hitting $886,885 by 2012, $1.29 million by 2020 and $3.3 million in 2022. Had Smiley’s compensation risen at the rate of inflation he would have earned $348,583 in 2022.

Summerfest did not respond to Urban Milwaukee’s requests for comment on Smiley’s payout. Nor did Mary Ellen Stanek, the Managing Director of Robert W. Baird & Co., who became board chair of Milwaukee World Festival, Inc. (MWF), the parent organization of Summerfest, in March 2023. But in the past Summerfest has said that Smiley’s compensation was “evaluated by an independent firm, Mercer. Mercer’s study took all job responsibilities into consideration when studying Mr. Smiley’s compensation, such as festival management, fund raising, construction management, facilities management, and the production of hosting over 35 annual events.”

However, the festival declined to provide any copies of the annual evaluation, or a list of comparable salaries at other organizations used to determine Smiley’s compensation.

In past comments to Urban Milwaukee, former MWF Board Chair Howard Sosoff said the organization considers itself “a private corporation” and determines the compensation for Smiley based on comparisons to executives at for-profit companies. Sosoff’s predecessor as MWF board chair, Ted Kellner, took a similar line, saying Smiley’s pay was in line with that of for-profit CEOs.

“They view themselves as a private corporation and they operate as such,” Bauman has noted. “That’s what private corporations do, they pay their CEOs astronomical amounts of money.”

But even when compared to pay for private sector CEOs, Smiley’s pay seems egregiously high. Smiley was paid more than 14 of the 45 top-paid executives of for-profit companies in Wisconsin in 2022, according to a report by the AFL-CIO.

Pay for private sector CEOs typically raises along with the size of the company. Thus, the CEO of Fiserv Inc., an $88.6 billion company, was paid $17.8 million in 2022, compared to $3.2 million for the CEO of the Brady Corp, a $2.9 billion company.

Compared to companies like Brady Corp or Artisan Partners Asset Management Inc., a $3.7 billion Wisconsin company whose CEO earned just over $3 million in 2022, Summerfest is a pipsqueak, with less than one-fifth the annual revenue of Brady Corp’s $322 million and about one-twentieth of the $1.23 billion annual revenue of Artisan Partners. Yet Smiley earned a bigger salary than the CEOs of either company.

Smiley has become so wealthy running Summerfest that he was able to buy a $1.64 million home on Pewaukee Lake in 2022, as Alex Groth reported. “The property has 3,437 square feet and four bedrooms and three bathrooms.”

Summerfest is a charity whose mission is to serve the Milwaukee community and it has a 27-person board of directors who are supposed to assure it does so. Yet in announcing that Sarah Pancheri, the former vice-president of sales and marketing of Summerfest, would become its new president, Summerfest offered no answer as to how this was decided. Why was there no national search for his successor? What was Pancheri offered to take the job of CEO? What will Smiley earn as part-time advisor and consultant, something the press release also announced, for the 2024 year?

None of that was disclosed by Summerfest’s board. It has become a very secretive organization.