The company that owns Madison Square Garden has become an all-in-the-family piggy bank for the billionaire Dolan clan.
Cablevision CEO and Garden boss James Dolan lavishes handsome pay and perks on his wife, his sister’s husband and even his mother-in-law.
That’s on top of the lucrative jobs or board seats the embattled cable TV titan bestows on his father, sister, two brothers and even his father’s brother-in-law, federal regulatory filings show.
Dolan’s pay package weighs in at $15.8 million – including $378,536 for chopper flights, private home security, car and chauffeur and free phone and cable and Internet service, Securities and Exchange Commission filings show.
The 51-year-old part-time rock musician outpaces his father, Charles Dolan, Cablevision’s 80-year-old chairman, who pulled down $11.8 million in 2006, including $490,977 for air travel, car and driver, private security and other perks.
“Those salaries could improve the arena, improve the Knicks and provide a raise for my workers,” said Juan Galan, lead organizer for Local 100 of UNITE/ HERE, which represents the Garden’s 325 food and merchandise workers, who earn $10.99 an hour and have worked under an expired contact since May.
The windfall payments come as the Knicks keep losing, the fans keep booing, despised coach Isiah Thomas clings to his job, stockholders fork over millions to settle a sexual harassment case – and an irate City Council angles to strip the Garden of its $11 million annual tax break.
Backed by Council Speaker Christine Quinn (D-Manhattan), the Finance Committee on Monday held the first of two hearings on a resolution calling on the state Legislature to repeal a unique property tax exemption that has cost the city $287 million since 1982.
“If the Dolans can afford to pay hefty salaries to so many family members without putting a dent in their bottom line, they can also afford to pay their fair share of property taxes,” said Councilman David Weprin (D-Queens), the Finance Committee chairman.
Countered Cablevision spokesman Charlie Schueler, “Everybody knows that executive salaries have nothing to do with historical tax abatements, and we consider attempting to connect the two as nothing more than the Daily News continuing its ongoing anti-MSG agenda.”
Five Dolans and a Dolan brother-in-law sit on the company’s 17-member board of directors, and their dominance is a red flag for shareholders and corporate governance watchdogs.
The Corporate Library, a Portland, Maine-based research firm that analyzes corporate data, has awarded Cablevision an overall rating of F every year since 2003, citing “high concerns” about James Dolan’s pay, the independence of his board and the “potentially conflicted directors” on it.
The company declined to comment on the F rating.
“As with many other media companies, Dolan family members have been actively involved in the executive management of Cablevision since the family founded the company 35 years ago,” Schueler said, insisting that the Dolan family has “served Cablevision’s customers, employees and shareholders well, and we look forward to their involvement continuing into the future.”
Vincent Tese, the state’s former chief of economic development, is one of three members of the compensation committee, which evaluates performance, determines “compensation philosophy” and approves payouts. Tese collects $263,550 as a part-time board member.
Charles Tese, his brother, receives $105,162 as a “nonexecutive officer” of the Garden, whose chairman is James Dolan.
That puts Vincent Tese in the ticklish position of figuring out how much to pay his brother’s highly demanding boss.
“We have fully disclosed in public filings that Mr. Tese is an independent director under the standards of the New York Stock Exchange,” Schueler said.
Tese declined to comment.
Dolan’s paycheck, which is more than 20% higher than the median CEO pay for a company of the same size, “raises concerns over the long-term alignment of executive compensation with the long-term interests of shareholders,” a Corporate Library research report says.
Because the Dolans control 74% of Cablevision’s voting power, there’s an increased risk that the “interests of minority shareholders are subordinated by the interests of Dolan family interests,” the report found.
Those minority stockholders include New York City: Its five pension funds held 689,616 Cablevision shares, with a market value of $18.6 million as of Dec. 1.
City pension pros bucked the Dolans in October when the family sought to take Cablevision private. They voted against their $22 billion bid, which was shot down by investors who felt it undervalued the company.
“The proposed transaction was not in the city’s best interest,” said Jeff Simmons, a spokesman for city Controller William Thompson, who manages the five funds.
“This is a company that’s constantly increasing our cable bills, and constantly blaming increased costs, so it’s a little troubling to learn they make this kind of money,” said City Councilman Lewis Fidler (D-Brooklyn).
