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Bill Marolt – Overpaid or Underappreciated?

Tuesday, April 20th, 2010

A recent article in the New York Times revealed that USSA President Bill Marolt took home $650,000 in the fiscal year ending April, 2009.  The article made waves in the US cross-country ski world, especially given the fact that prize money for overall SuperTour winners was not paid last year.

There is no way to spin it.  It looks bad, and it is bad.  When Marolt is given a $250,000 bonus, and Colin Rodgers is told he will not be getting his $3,000 in prize money?  Not good.  Regardless of how the corporate structure functions, the specifics of budgets and allocation of funds between sports, this never should have happened, and USSA deserves the bad PR that the Times articles has created.

But the whole situation does bring up some interesting issues.  Like it or not, Marolt’s hefty payday fits the American corporate structure quite well.  CEO pay has been in the news plenty of late, and it is the American way to pay top executives massive salaries and bonuses.  And for what it is worth, Marolt’s bonus is peanuts compared to many corporate bigwigs.

The question that I find worth asking, is not how much someone is paid, but whether or not they are worth it.  Finding an answer in most cases is not easy.

One good example is Apple’s Steve Jobs.  Few would argue his value to the company.  He pulled Apple back form the brink of failure, and has made it into one of the most successful companies in the world.  Of course the example breaks down when you note the Jobs is paid only $1 a year (he does own 5.5 million shares of the company).  But the point is that Jobs adds big time value to the company – both in terms of the work he does and the perception of his role.  He could be one of the highest paid CEOs and still be a bargain.

Many CEOs, however, do not offer such clear value, and one has to wonder if they really take their company to another level – a level that someone paid a fraction of the amount would not be able to reach.  This is particularly true in the the case of USSA.

Who is more important?  Marolt who raises money, secures sponsors, and sets the overall direection of the organization?  Or the coaches who develop athletes and put them in a position to succeed? Or the athletes themselves, who are statistically among the the top fraction of a percent at what they do?

Without the money and good management, the US Ski Team and USSA couldn’t exist, but without the hard work of some of the best coahces in the country, and the athletes, there could be no success.

This is particularly true in the case of the athletes.  They are NOT replaceable.  If Kikkan Randall decided to leave, USSA couldn’t find someone else.  Professional sports like baseball have a more reasonable hierarchy of payment.  Managers, coaches, General Managers and Presidents are all paid significantly less than the players.  Why?  Because those roles can be filled by a large number of people.  The players are the scarce commodity and are paid accordingly.

The difference in skiing is that there are no options.  A national team skier could quit the USST, but would have nowhere to go.  He would still want to race the World Cup and the Olympics, both of which are under the auspices of USSA.  And so in that respect that athletes are permanently indentured to USSA and have no leverage.

When evaluating Marolt, one has to take into account alpine skiing and snowboarding.  While the cross-country results may have been disappointing to some, the other sports, including nordic combined, have flourished in recent years, with many US medals.  If the credit is given to the man at the top, Marolt has done an excellent job, and while at the risk of incurring the wrath of the FasterSkier anonymous peanut gallery, XC has shown improvement, and more importantly a long term commitment to excellence.

I am in no position to judge how much credit Marolt deserves for these successes.  When talking to new US Ski Team Head Coach Chris Grover I asked about the consistency in the program, noting that in the 90’s there was quite a bit of turnover in staffing.  Grover agreed that the consistency over the last decade has been a positive thing and credited that in part to Marolt.

Another issue to consider is Marolt’s efficacy at bringing in sponsors and other donations.  If the USSA board feels Marolt does an exceptional job at this – a job that someone else could not do, or at least not for less money, then he is probably worth every cent.  USSA is dependent on big sponsor contracts and donations.  The organization would not exist without someone who does a very good job at this.

John Farra, USSA XC Director told me that “It isn’t my business what someone else makes.  My job is to squeeze every bit of value out of every dollar that I am given.  He [Marolt] is a huge fan of what we do.  Four years ago we saw a big increase in the cross-country budget, and I think we are benefiting from that, and I would like to see that again.  And if that is what it takes to retain a guy like that…who has been a champion for us and really supports our sport, so be it.  Just make sure I keep getting that dollar I can squeeze because that is what I can control.”

It is also important to remember that Marolt doesn’t set his own salary.  The USSA Board of Trustees does.  Obviously they think he is worth it.  And it we must also remember, as Tim Kelley points out on a comment here, that USSA is not competing against other non-profit cross-country ski organizations for executives, but with colleges, universities, other large non-profits, and even corporate America.  This will drive the price up.

And bonuses are a common and often effective means to promote effort and results.  Just like athletes are given win schedules, tying a large part of someone’s pay to how they perform is a good way to bring out their best.

It may sound like I am defending the large salary and bonus.  That is not my goal  But a knee-jerk reaction (which I had when I saw the intial number) gets us nowhere.  As with most things, there are subtleties that must be considered.  And while the Board clearly thinks Marolt is doing a good job, it doesn’t mean he is.  Or that he is doing a better job than someone who could be paid less.  But as long as the US Ski and Snowboard Team is winning medals, and as long as Bill Marolt is guiding that effort and bringing in major sponsorship bucks, there likely won’t be any major changes.

However, as stated above, someone should have made sure those SuperTour purses were paid.  Obviously the money was there…just not in the right place. That never should have happened, and the proper thing to do in light of this new information is to belatedly pay out that prize money.